francine: pushing back, fed officials say patience is the key despite investor expectations for a rate cut. deutsche bank's chairman faces anger at the agm as bloomberg learns some shareholders want to oust him. india wants more modi. earlier accounts show they are set to secure another majority. the stock indices touch an all-time high. good afternoon, if you are watching from asia, this is

"bloomberg surveillance." europeans aret the pollsay and, as are still open, we are not allowed to discuss any voting issues until voting stops. looking at the markets, we're seeing a nice increase. and we are speaking to the eso president -- ifo president. but first, let's get first word news in new york city. to elect voting begins the next european parliament with the u.k. and the netherlands kicking off the election. they will sit for the next five years -- the mps will set for the next five years. results are due after the last polling station has closed sunday evening.

prime minister modi is set to win a majority in india's election. extended the lead, easily winning the 272 seats needed to form government. indian equities are jumping as the election results come in. minutes of the fed last policy meeting shows officials feel their patient approach is best and will remain appropriate quote for some time. several members sided with ew atman jay powell's vi the recent easing of inflation is likely to be transitory. a judge has rejected president trump's request to keep banks from producing financial records for lawmakers. it could allow congress access to his tax records and information about the financing of his family businesses from deutsche bank along with personal bank records.

the indonesian currency is hitting a five year low after the worst political violence in jakarta in years. police have fired a tear gas -- fired tear gas and a water can as the defeated presidential candidate says he will launch a challenge to the results. may'ser of theresa cabinet has resigned, saying she no longer believes the government will honor the results of the referendum. may'sa may is -- disappointed but would deliver on the results. hardeo of cisco says it is to say if quite awake being sidelined help his business -- f if huawei being sidelined will help his business, saying it has had a minimal effect -- saying tariffs have had a minimal effect on pricing. done aneams have

amazing job, putting us in a position with the latest 25% have had a nominal affect. >> 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. we are getting live pictures from frankfurt deutsche bank's agm has just gotten underway. the chiefr from financial officer a little bit earlier on at the annual general meeting. see revenue troubles ahead, revenue so far, this year, has not been as we would have wished. that was with james fumbled the who had given an interview with the recent press papers. we have gotten some numbers from germany, the latest business

confidence estimate has fallen. joining us is the president of the ifo institute. as always, we look forward to speaking to as to whether this blip in the german economy is transitory or not. are you worried going forward? rarity -- are is a reason to worry about the sector. german manufacturing is shrinking for the third quarter in a row, and what we now see is that this is spilling over to the services sector. in the reading of today's index, the weakest part was the service sector. so there is reason for concern, this trend has to be stopped. francine: are you expecting a recovery in the second half of the year? clemens: we are, in fact.

we do not expect to germany to go into full recession because consumption is strong. we have had a very strong increase in consumption that is not going to last. domestic demand is stabilizing the economy to some extent and consumption is also strong. we expect this to stabilize, but there can -- there are concerns. it is not just exports, there is also week demand domestically. a stabilization, but nothing like any strong recovery. what is your expectation for the trade war? clemens: very difficult to predict. i think there will be some kind of agreement, but maybe not long-term agreement that will

give stability. there is a high degree of certainty for the companies and the conditions they operate. trump has no interest in a full-blown trade war, one would think, because he wants to win year's election and needs a strong economy. but still, we never know how he acts, and the chinese may expect that and think they are in the stronger position. iny may be unwilling to give , and in the end, they might escalate. francine: could you have a recession or downturn in germany still with consumer strength? clemens: i do not think the downturn in manufacturing is strong enough to take us into a full-blown recession. also, construction is very strong. if there was an escalating trade war that spills over to europe, it is still a possibility.

if there was a hard brexit, i think that could take us closer to a recession. but currently, domestic demand is too strong, i think it will keep us away from recession. francine: could you just delve a level deeper into how you see this trade war impact in germany. if there are no new tariffs on german carmakers, is it psychologically impacting consumer demand, or have you see that playing out -- how do you see that playing out? clemens: i think demand will continue to be week as long as there's so much in the markets. uncertainty means companies postpone purchases of goods. consumers will be more prudent, buying fewer german cars. all of that will be a problem for german manufacturing. we also have to see that domestic conditions are not

favorable and we have rising energy prices. highrate taxes are relative to other countries, so this is all waiting on the development of manufacturing. thanks so much, president of the evoke institute -- the ifo institute. ascks and futures dropped trade worries a deep in. deepen.nd.-- more on tesla next, this is bloomberg.

>> would you believe that it is important for us to follow the facts, we believe nobody is above the law, including the president of the united states, and we believe the president of the united states is engaged in a cover-up. >> i just saw that nancy pelosi, , made aore our meeting statement that we believe the president of the united states is engaged in a cover-up. i think most of you would agree to this, i am the most transparent president probably in the history of this country. was speaker of the house nancy pelosi and donald trump -- president trump having a contentious back and forth yesterday. let's get straight the bloomberg business flash in new york city.

-- to the bloomberg business flash in their city. >> bruno le maire is speaking after meeting the japanese economy minister in paris, calling on the two companies to quote advance progress and consolidate their alliance. the partnership has been rocky after the arrest of carlos ghosn. -- to the bloomberg business flash in theirhe denounces all d pretrial hearings start on thursday. football's governing party has scrapped the plans to include more seats in the 2020 world cup. they say that growing the seats would have too much impact on the host qatar, meaning the tournament will not be expended until 2026, when the final will be held jointly by the u.s.-canada-mexico. latest fed minutes show policymakers will be patient for some time, even with inflation below target. the markets have bet on a 70% chance of a rate cut this year.

fed president john williams had this to say about the rate cuts. >> we have inflation a little below our goal. our view is to basically be right where we are. and i don't see any strong arguments today, based on what we have seen in the data or other information, to argue to move interest rates one way or the other. francine: joining us this morning to talk about trade and the fed, head of u.s. equities and thebia threadneedle global multi-asset strategist at jpmorgan. let me start off with you. when you look at trade concerns, are they going to be on hold for much longer? say the traded concerns at some downside risk to the growth outlook. particularly, even take this personally, but also to inflation.

came out,utes documented for a meeting that happened before escalation, and it was natural they were talking about some upside risk. that, after what we have seen over the last few weeks, that becomes more balanced. in terms of what the markets are pricing, i think that divergence between the fed saying we are patiently in positive carry, versus what is priced in, the thing fixed income markets are bearing in mind is the recession risk on a 12-24 month horizon cannot be discounted, even if the fed says we are in pause. if you listen to certain members, they say there could be cutse -- a case for rate and i would say that is the takeaway, there are quite divergent views. francine: what does that mean for the markets? does the fed have a --munication problem, nokia

nadia? nadia: the fact that they are still on hold is the prudent thing to do. , the likelihood of a recession has increased, because indeed have a full-blown trade war could lead to know earnings growth or a recession in the u.s.. so it would be a good thing to do. the right now, we do not have any data to support cutting the rates. francine: let me cut you off that we are at the agm in frankfurt, the chief executive of deutsche bank saying they are prepared to make some tough investment bank cuts. we had already heard that they were looking at the investment bank. ,he seems to go a step further but we are waiting for any detail he will give.

you can see him talking right now, live in frankfurt. when you look at my chart which looks at the fed hike and what treasuries can do, the fallingly hawkish tone on deaf ears in the bond markets, when do treasuries get repriced? as i said, i think the economic data has been good. unless you have evidence that you are headed towards an important slowdown, i don't think it would be good for the fed or the equity markets to expect a rate cut. so i think there is always a level of divergence. from an we standpoint, that is what i can talk about. the fed on hold is a good thing otherwise we would think the odds of a recession are larger than what we thought. so it is actually a clear

message that the state of the economy is still robust. francine: thank you both. we are also getting some live pictures from frankfurt where the deutsche bank's agm has just started. they are seeking to win back investor confidence following the breakdown of takeover talks with commerzbank. he has just promised some tough cutbacks to the investment bank. he makes no mention of the equities units as he highlights some of the successes. people are reading that as one of the things he will go after. we do not have confirmation on sewingst mr. savings -- did not talk about where that would likely happen. he did not mention the equities business he did say there are tough cutbacks to come.

of course, we will continue listening to christian sewing and have the very latest on deutsche bank.

♪ [speaking foreign language] christian sewing, the chief executive of deutsche bank is the man of the hour.

he says that far-reaching changes are needed. to get back trying investor confidence after that breakdown of takeover talks from commerzbank. joining us from frankfurt is annmarie hordern. pressure is also mounting on the chairman, what else can we expect? annmarie: that is right, pressure is certainly mounting. i am inside the agm, a packed stadium seating venue. i am alongside a con of shareholders. to ofty -- a shareholdersn. the situation is very sad. i spoke to two shareholders who said there needs to be an overhaul of the investment bank. they made the to cut the investment bank, that has been a real sore spot. this is the unit that assumes the most capital, page that big

bonuses, and is the least profitable of the three main divisions. that is what he is outlining. more cost cuts are cutting, he is known to be unapologetically tough. he is really trying to trim the bank. but on the other side, we have nine straight consecutive quarters where they are just losing revenue. the cfo was talking to a local newspaper, saying there is still going to be a lot of revenue blues ahead. so how do they cut costs, and at the same time, grow profitability? francine: the concern is that the chief executive has sped up cost cuts over the last 18 months and it has failed to lift the share price. why would this time be any different? annmarie: it is a very good question. they seem to have lost confidence in the share price completely.

as they take the stage, it has taken another record low. what investors are looking for is the fact that they want to the chairman to go. he has been at the helm for seven years, he has three -- see the three different management changes, but since he has been in position, shares have fallen 70%. it is not just shareholders, but ecb regulators think they do not want to be a regulator anymore. they are suggesting his exit would be beneficial, that shows the depth of concerns over deutsche bank. francine: thanks so much, annmarie hordern in frankfurt. from with us is nadia columbia threadneedle and th rushka from j.p. morgan. so how do these banks go up front and survive this? is it a business model problem, they need to consolidate?

thushka: to your point about business models, banks are asked to extend loans at attractive rates. there are asked to clean up balance sheets balance sheets and generate high interest margins. that configuration is hard to achieve in this environment of negative rate policy. so the concept of moving towards because system could it, but it would be marginal, in our opinion. francine: thanks so much, both stay with us. with trump considering further blacklisting of chinese companies, we talk trade and the tech war. this is bloomberg. ♪

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♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. pushing back. fed officials say patience is key as escalation in the

u.s.-china trade war keeps them on hold for even longer. deutsche bank's executive signals tough cutbacks to the investment bank. we're live in frankfurt. and early counts in india show the djp is expected to confirm another majority in the country's biggest democratic election. morning, everyone. good afternoon if you are watching from asia. this is bloomberg surveillance. us take a look at the movers with dani burger. who knew that one of the biggest stock stories today would have to do with legoland. an activist investor has urged .hem to look at private equity it investor say public markets are not doing them service. they are undervalued. marlon has responded and say that they do continue to look at all options. that they are happy with their current strategy. tate & lyle to the downside.

2019 numbers did beat expectations, but the 20 outlook looked a little soft. shares dropping. the ceo talking to an edwards earlier today saying that it is just some short-term headwind. we continue to look at the progress of deutsche bank. the ceo signaling that there are some cuts, tough cuts to be made. future of the shareholder continues to be a story. cheers falling to an all-time low, francine. let's get straight to the bloomberg first word news in new york city with viviana hurtado. putting begins to elect the next european parliament. the u.k. and the netherlands kicking off the election, choosing 99 of the more than 700 mep's. the remaining 26 countries head to the polls. results are due after the last polling station has closed on

sunday evening. is expecteder modi to win a majority in indiana's -- india's election. to 290d is extended seats, easily winning the 272 seats needed to form government. equities jumping as the results came in. hitting the 40,000 milestone. and minutes show that the patient approach is best and will remain appropriate "for some time." members of the fomc cited with chairman jerome powell's views is likely to be transitory. a federal judge rejected president trump's request from keeping banks from producing financial records. it is upheld on appeal. it could allow congress access to trump's tax records.

and the rupiah hitting a five-month low after six people died in the worst political violence in jakarta in 20 years. police fired tear gas and water .annons the defeated presidential candidate will launch a legal challenge. and there are resigning from theresa may's cabinet saying that she no longer believes the government's approach will honor the results of the 2016 referendum. the mps office was disappointed and will stay focused on delivering brexit. global news 24 hours a day on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. francine: we are getting breaking news.-- suspended from trading.

that is the latest on the french supermarket that has branches across the world. the supermarket earlier was dropping to an eight-month low after suspending shares. they are waiting for a statement as we are from casino. we heard that short-sellers were attacking the holding company structure. we will have more on casino. let's go back to the trade story. beijing is denouncing u.s. actions after trump debates whether to blacklist more chinese tech companies. meanwhile, the biggest financial firms are growing increasingly pessimistic. goldman sachs is off of a trade stalemate with the u.s.-china trade war continuing. joining us is bloomberg's chief asia economics correspondent. what is the latest? war the risk of a trade

that is going to escalate, this is baseline for many economists. >> exactly. we are seeing a market shift -- marked shift. a lot of it was political brinksmanship and ultimately a deal would be done, but now we are starting to get views from deal may ors that a may not occur at all. and you're talking about a 65% chance of donald trump going ahead with tariffs. sachs saying that they will probably shift to a baseline. and wondering if there is a mood shift from weeks ago. is on theike a deal

table. but don trump looks to be headed towards a much more protracted trade war. francine: what can china do next? will they ratchet it up? will they use financials and renminbi? drawn aseem to have line in the sand. there was commentary if they -- we have the federal reserve president james bullard question aboute a negotiating tool. he had the point that if they were to do that, it would not be a very effective one. i think it is a broad view of that china would be

certainly pulling the nuclear option. much, ourthink you so bloomberg chief economics correspondent. there has been a shift in the markets, at least a lot of research that i get. could see this trade war for five years or 10 years. and it could get worse. what does it mean for how the market reacts? >> i say that you are right. moving toward a cautionary pessimistic outlook on the tray discussion. i say we have to get used to this new normal. a prolonged approach to look at tariffs and structural issues. we have seen the combination of those two. by definition, it should be more protected. how should markets bill this in?

the second is the ability for growth to be significantly higher. becoming less and less likely. holding that duration at current levels still makes sense alongside having some risk. the preferred option is to be invested in credits. we also have low recession risk today in the u.s.. that means credit is our preferred investment. francine: how much does this actually hurt the u.s. consumer and what you follow, which is u.s. equities? >> reports and earnings season has shown that companies surprised by maintaining their margins all of last year and all

the way to q1. we can see that companies have a pass-through. the consumer has been bearing the brunt of that. having said that, the consumer is still in very good shape. there is full employment. wages are rising. a very healthy balance sheet. at the moment, we have not seen any pressure yet. but should those trade tensions escalate further, then i would expect the pressure to be seen at the consumer level in the way of lower demand. are extraif there tariffs passed on to the consumer, what does it mean for what you like and what you don't like? buried --ogy is very varied.

semis have borne the brunt of the selloff. they are the most exposed to wei into the to hua chinese supply chain. and so our industrial companies. you can see that those are the sectors that to the worst last year. , the safe flipside haven is really the software. exposure that have the and asset light. , the softwarend service. companies like microsoft. again, you can see a long way in terms of them deploying to the cloud. we're still very early on that move.

the price action has been pretty rational. the retailers side, the consumer side, companies tend to have less .ricing power and you see that the divergence of fortunes there. t.j. maxx versus department or that pricing power. francine: thank you both. and from.s. equities jpmorgan asset management. she stays with us. stay with surveillance. plenty coming up including india's prime minister heading for a landslide victory. indian stocks rise. the bjp party gets a comfortable lead.

we will have the latest on that, next. this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine lacqua in london. breaking news out of pboc. nothing bad. pboc says china's effect on the market is stable and it will prevent any disruptions. justchecking in -- we were talking about that. in retaliation to what the trump administration was doing was that china would do something with renminbi or they would do something with treasuries. reassurance today from the pboc that the moment, they believe

the chinese affects market -- fx market is stable. and that they will prevent disruptions. indian stocks have reached an all-time high as prime minister modi looks to win a single party majority. in early vote counting, the bjp party source to a commanding lead. benchmark index touched 40,000. us get to bloomberg's government reporter. is this a landslide victory or are we expected to get it confirmed? or is this a pretty convincing win? >> exactly. earlierls that cannot this week predicted a landslide victory for modi with an average of 300 seats in the 543 seat parliament. modi seems like he's going to surpass that optimistic assessment.

it looks like his ruling coalition could get around 350 seats which is more than he won in 2014. remember, that was the first single party majority in india in 30 years. the size of that mandate gave him a lot of power to come in and push out his policies. now he is coming in seemingly with an even bigger mandate. around half of the votes have been counted at the moment. we have someone leaders including benjamin netanyahu coming out and congratulating modi on winning a second term. the opposition here seems a little bit defeated. i think some people are sort of dusting it off and saying that modi is coming to another second term. what does it mean for the next five years? what will mr. modi start off with? the economy and the reforms that

he started off with, will that wayne a little bit? little bit? he wins anme that election, people say it will embolden him to do more reforms and push those policies. and i think that this victory, this mandate might prove that the formula he and his party have worked out seems to be working. they might continue with that. it is sort of a mix of incremental economic reforms. there, notere and enough to fully satisfy investors but something that modi thinks he can roll out without alienating his core base. it is a little bit of a mix of muscular foreign policy. you saw modi pushing back against pakistan, launching airstrikes. there is also a more troubling nationalism,al

religious nationalism playing for the hindu majority here. some analysts are worried that might push him a little bit harder on that edge. be an agree that modi can unbelievable leader. people are settling in to realize he will probably be the prime minister for the next five years. much, ourthink you so government reporter in india. our guest from jpmorgan asset management, we're talking a little bit emerging markets. idiosyncratic stories with south africa, venezuela, and india. do you look at it more homogenous lee? >> there are global sectors that affect em. our view, the first is clearly there are winners and losers.

that is the first aspect. india would not be in the firing line directly. but as we say on the political front, that is important. the second is we get is double whammy that is affecting them. dollar hasn't depreciated. we still seeollar strength. the second leg of that would be weakness affecting major trading partners. in the third is what we just said. there are winners and losers. if there are changes on a structural basis, there could be countries that benefit. is it through currencies? or do you buy all asset classes? >> we implemented across currencies. our view is more neutral. i think this reinforces that further.

francine: global multi-asset strategist at jpmorgan. coming up, we hear about what industries are right for disruption. he will hear a preview of tonight's leaders with look walk. this is bloomberg. -- leaders with look walk -- leaders with lacqua. this is bloomberg. ♪

francine: economics, finance, politics. lacqua airs tonight. i speak about the future of which industries are ripe for disruption and his biggest regret. >> i did not want to sell and get rid of it. i would have loved to be able to take it to the whole of our seven-year transformation. we only did half of it. sold -- wemi, the sold pubs quite early. do.it still is a lot to it hasn't moved on.

it is difficult because i would have to go through the numbers. last time, we moved it from a very male-dominated space to be much more spread across different demographic groups. last 10 to 15 years, we got an a norm to sell far more drink. i think it became vastly too dependent on a rather drunken culture. i think one needs to really try to move away from that. youngou look at what people are doing today compared to 10 years ago -- and when i say young people i mean 14 or 15-year-olds. they have a different, more serious attitude.

a lot of the pubs are very big now. the same way the working man's pub died out in the 90's. spit and sawdust, drinking 12 pints of beer and go home to .our wife food is in the oven, burned. that went. getting drunk on a friday night, saturday night, monday night, centers, night in city i think that will go. the culture will change anyway. what will they give the new young people that are very different from the young people 10 years ago? francine: catch the full episode tonight at 7:30 p.m. london time. we were just listening to the chief executive of deutsche bank who is probably having a little bit of a tough year. willard them say that they

cut deeper into the investment bank. also has the backing of shareholders that so far have not backed him after they said they would stop merging with commerzbank. they are still seeking to win back investor confidence. youas saying i can assure that we are prepared to make tough cutbacks. are wonderingtors exactly where the cutbacks are. bloomberg surveillance continues in the next hour. tom keene joins me out of new york. we will have more on deutsche bank. we will talk to scott from blackrock. look at euro markets and trade tensions. this is bloomberg. ♪

francine: pushing back.

fed officials say patience is the key. u.s. chinain the trade war, could a keep them on hold even longer? the bank's chief executive signals tough cutbacks to the investment bank. we are live in frankfurt. and modi is set to win a majority in the general election in india with a landslide win. what it means for economic reforms. good morning, everyone. this is bloomberg surveillance. the u.k.minder that and the netherlands are voting today and european elections. not permitted to discuss any related issue to the election because of u.k. regulations. that also includes brexit. are special laws for the united kingdom and we're thrilled to broadcast only there but on the continent. am i right that results come out sunday evening? because of the many nations, there are a number of days of elections?

that because we have elections here today in the u.k., we will have a good idea on monday what the results are. we will have a look at that and today we look at the u.s. china trade war and the impact this could have on central banks. but history to the bloomberg first word news. reserve isral pushing back against rate cuts but the market continues to seek . officials expect patience to be appropriate for some time. and it could keep them on hold for even longer. will deploy up to 5000 troops to the middle east. will be ament defensive effort. the u.s. is already sent an aircraft carrier with bombers to the region. a warning to deutsche bank employees.

changes are needed, including a cut to investment banks. ,oday's shareholder meeting that areing businesses unlikely. the business was not included in that list. ghosn's fightos to prove his innocence has made it to the courtroom. allegations range from falsifying international records to redirecting company money into its own account. the trial is expected to begin next year. twitter.d on tictoc on this is bloomberg. equities, bonds, currencies, commodities. we have seen sterling weaker. with the solid 98 blended index.

oil a little bit light as well. equities turning. the two year yield in the u.s. is worth watching. not down to new lows, but nevertheless, it should be right on the screen. 20% -- 2.20%. the united kingdom has .88. cable is sport, isn't it? francine: we won't say much more because of the election but it is a good way to look at it, tom. i am looking at asian shares a little bit earlier on. and we were kind of mixed because of the trade tensions between the world's largest economies that shows little signs of easing. but i am also looking at the indian share price because it was gaining quite significantly

and recouping some of the gains. if we do have is landslide victory from modi, we're hoping investors will find out annexed couple of weeks exactly what he hopes to do. tom: i agree. it is a huge deal and india. this is a real surprise as well as a. i want to show a long-term chart on deutsche bank. the elegance of this chart going back for years or five years. if i was going to teach a course on drift in university, this is absolutely textbook. it is perfectly described in this month of deutsche bank down. we are literally heading toward new lows of 6.42 on euro. murray -- now, and

annmarie. voters are looking at a lower share price. christian just wrapped up his seat and shareholders will be voting this afternoon. the supervisory board has a lot of pressure. are a lot of shareholders here and a lot of them have said to me that they are very sad about the situation. some even agree. he needs to go before his term expires. ecb officials at the bank would be better off without him as a chair. there are great matters this week. see ecb officials really getting involved in executive personnel issues. it just goes to show you the depth and concern over deutsche bank. the separation is that the

chairman is talking about deutsche bank as a global player. and others are looking the other way as a dominant national bank. >> i think this is the big question facing deutsche bank. of thebeen the dream chair, but under him, we see the stock off from 70%. it has been to three management changes or do they want what many shareholders wanted, and overhaul of the investment bank? with the ceo said will be coming in terms of cutbacks to the investment bank. they will change it more radically and more quickly. bank is what has been endorsed by deutsche bank. is the least profitable among deutsche bank's three divisions. he said three things would be off-limits.

foreign-exchange, global credit-rating -- trading. he did not mention equities business. the big question now is, what is the timeframe for all of this? when and where were the big cuts coming from? the even cut things like the bankers taking first class tickets. where are these cost cuts really coming from? by contracting revenue. how do you do all of these things at the same time? francine: thank you so much. turnage trade, beijing is denouncing u.s. actions as the trump administration debates whether to blacklist more chinese tech companies. some of the biggest financial firms are growing increasingly pessimistic. there are higher odds of the trade still made. dutiess have new hike

made the baseline forecast. andguest is from blackrock head of u.k. investment office. now.e joined everybody in the market or almost everybody found a big deal. april said they will find a solution and suddenly it is baseline. and i we trade war to last five or 10 years. are we flip-flopping? five to 10 years, the fact that the dispute is regarding chinese companies, that comes after tariffs and the standalone issue. it will not be multigenerational. impact is a bit more manageable for both sides. the longer-term strategic play.

francine: what does this mean for actually how the world economy works and for the u.s. consumer? >> the important thing is the separation. ofwill be in a time competition between the u.s. and china going forward. this would shift volatility assumptions going forward. but being played out, how it will impact the u.s. and chinese economy, both players are incentivized to reach some kind of agreement with the u.s. elections approaching. our view is that they will reach some kind of agreement in the near term. impact on the economy will be relatively muted so long as tension doesn't persist. tom: price up, yield down. i am looking at the u.s. two-year yield and my eyes are failing me. 2.1957. why is that, scott? the trade issue?

>> increased geopolitical tension. in 2019 and 2018, it is a risk parity. have to do with the patient hundred by the fed. there's not that kind of upward pressure that we saw in 2018. as you look about expectations for rate cuts, that will be driven by geopolitical risk. i think it is important to separate the specific trade tension and the broader competition between the two countries going forward. the market is focused on both of those together. i think you have to be very careful with that analogy. u.s. and chinese economies are very interrelated. good to have both of you with us as well. elections in the united kingdom and we are very limited in what we can say about the elections

and about united kingdom politics. but there are many other themes out there. and the challenges the president faces in the rose garden and from the judiciary of the united states. stephanie baker will be with us in a bid on the swirl of american politics. this is bloomberg. ♪

>> would you believe that it is important to follow the facts? we believe that no one is above the law including the president and weunited states believe the president of the united states is engaged in a cover-up. i saw nancyump:

pelosi made a statement that we believe the president of the united states is engaged in a cover-up. as i think most of you would agree to this, i am the most transparent president probably in the history of this country. tom: a wild day at the white house. the president of the united .tates its stephanie baker is the perfect person to talk to. she is really quite good. the flow of money and all of mr. manafort. if we drag it over to civics , executive branch, policy and the legislative branch cap there isy after day, the judicial branch speaking. how do you interpret the judges's response to these many litigations?

>> they are responding as many people expected, affirming congress's right for all of these materials. it is constitutional to carry out oversight over the presidency. cohortly, trump and his are pushing back, saying that this is congressional overreach. and all of these efforts to continue the investigation are just an attempt to take him down before 2020. others say they are just doing their job enforcing the law. most lawyers knew that trump is going to lose on the various subpoenas. it is clear congress have the right to do that. and most lawyers believe he will lose. so good at this.

it you have enjoyed seeing the appeal process. can you wrap it up in 23 minutes or a half-hour? this is not a sitcom. there will be appeals. what is the difference between appeals at the judicial things we have seen the last couple of days? >> i think he is likely to lose on the appeals. trump and his supporters have said that the judges that ruled against him on releasing information from his accounting as love deutsche bank and capital one financial information, those were obama appointees. even bill barr says the judiciary is becoming too strong. you can see that they are following the letter of the law. most lawyers think this is a fairly straightforward case. it is clear from what happened yesterday in the rose garden that trump is rattled by this.

he is worried about this financial information coming out. it is inevitable. it looks inevitable that it will come out and what remains and it remains to be seen. tom: stephanie baker, thank you so much. we will be monitoring that all through the day. david westin will have special coverage at the 12 noon hour new york time. a reminder of the u.k. and the netherlands voting today in european elections. the polls are currently open and we are not permitted to discuss any election related issues due to the u.k. regulations and the voting will stop at 10 p.m. london time, 5 p.m. in new york. francine: what we can talk about is the indian election with modi getting a landslide win. modi winning yet again. we will build a strong and

inclusive india. he is not sure that his party would get it because he had such a big win. but investors are thinking he can really push some of the reforms that he promised. a little bit different in india shortly. this is bloomberg. ♪

>> this is bloomberg surveillance with your bloomberg business flash. amazon is creating a wearable device to recognize human emotion.

they described the gadget at the health and wellness product. software can determine the emotional state from the sound of his or her voice. tesla stanley says that has gone from a growth story to one about restructuring. ae firm's analysts held private call to investors to talk about why they think stock of the headed for his lowest $10. supply exceeds demand. and the u.s. aviation regulators won't rush the boeing 737 mac back to the skies. the federal aviation administration will examine a proposal to fix the problem linked to two fatal crashes. tom: amazon, tell me my emotion. francine won't have dinner with me in london next week. wrongne: that was the

chart, but i will keep on smiling. doing a special amazon device. i didn't get that last question. francine stole that last question from me. we will get a special device just for surveillance, tom. tom: very good. francine: should we talk about the fed? tom: we should talk about the fed. deutsche bank is looking at new lows and we will have more on that in a bit. francine: on the fed, the latest policymakers will be patient for some time, even with inflation far below target. quite a contrast to market. scott.ack with >> sustained economic growth and an inflation target with the

transitory element close to target. that is how they described their outlook. i think the market is obviously reacting to geopolitical noise. reacting to this discussion around an insurance rate cut and inflation.transitory i understand why the market prices that way. but from a fundamental perspective, it seems stretched. what about tracking the base again? >> we see this parody issue where there would be some good balance. own treasuries and portfolio construction because of the value that they give you. the last couple of days is a very good example of that but it does look a bit extreme given the fundamental situation. it is relatively right from the horse's mouth. tom: let's go logarithmic right now and bring up this chart that

was chart of the year two years ago. it is a two-year yield, no big deal. i took the fed meetings out. what is important about this chart is that the regression towards higher yields had a steepening pickup beginning in the middle of 2017. that is evaporating. are we back on trend or running to about of new disinflation indicated by the two-year? chartyou look at the same , you would probably be even more worried about what that would tell you for inflation expectation. below the levels where the ecb would say it is time to pump again. , whatith high oil prices is the inflation market telling you? go to india.

the stunning results from mr. modi as well. and then there is deutsche bank as well. just really remarkable. the markets signaling they are upset. marie is here. please stay with us. much more coming up. looking at the two-year yield that scott was just talking about. 2.1916. if we get to 2.18, scott has to leave the set. i'm kidding. new york city a gorgeous day, but rain expected. believe i'm saying this. amazon, i'm getting emotional. yankees winning. ♪

francine: this is bloomberg surveillance. comment francine from london and new york. to eacher to cheat --

and every person that the u.k. and netherlands are voting today in european elections. the polls are currently open and we are not permitted to discuss any relay -- any election related issue due to u.k. regulations until voting stops at 5 p.m. in new york. sebastian is here for first word news. >> it has no intention to restart trade talks. the u.s. unilaterally escalated tensions and they want talks to resume. china blames the u.s. for escalating the trade war for imposing tariffs. the trade war is backing out on part of the deal. the american television after being captured in 2001. after beingtaliban captured in 2001. he treated guilty helping

patella ban and is getting out early for good behavior. the federal judge in new york has rejected the president's to keep his financial records from lawmakers. the judge had already ruled congress could see records from accounted for. and india's prime mr. modi is set to win a majority on his own. julie -- easily won the seats from parliament. --e than six and a million 600 million voters. 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. this is uber. tom: like to con -- drive the conversation forward. this view of the bond market isy from the actual yield

five years and then we will go five years from there. let's go to the united states chart which is not as grim as a european chart. but nevertheless, the trump election right here. higher yields and in tizzy as an. a rollover. spike, but itis is really something to see. we will get a 218 print on the two-year yield here in a bit. this is one of the charts the pros look at to indicate disinflation worldwide. >> we're seeing more and more economists saying the fed can focus on consumer price inflation, the wrong thing to focus on because it can lead to bad outcomes.

a second corporate news and deutsche bank. changes are needed. the chairman is facing angry shareholders. bloomberg sources say many of the lender's biggest owners want to see the chairman gone before his term officially ends in 2022. a series of botched turned efforts hasrnaround seen the stock plummet in recent months. it is great to have you on a day where he's not having the best of days, getting in front of shareholders and saying that will cut more to the investment bank. but he's done this before. >> the pressure that they are under from a share price perspective is at a record low.

and in terms of what they can do, they have kind of reached the end of the road a little bit to the extent that they want to scale back the investment bank. over whether they would need more capital to fund that, the shares were they are having plowedfter in billions of euros already. let's say deutsche bank is on a better footing magically. how did they grow? what is their modus operandi? to tell theailed narrative. focus the moment, the seems to be from a shareholder that the costs are too high. tom: what is the power of the big shareholders? the body language is there.

i get they are playing for the press. what is the power of these large shareholders right now? -- >> in germany, you have to look at the shareholder base in the course of governance. governance.ourse of in how they a role bank strategy is set. there is a somewhat concentrated shareholder base. hna with a sizable holding. the three investors are obviously playing a role. they playing? are are these investors all on the same page at this meeting? >> some are on the same page desire tods to the

replace the chairman. but it is early days. we have not seen a strong, definitive move. thank you so much for writing for bloomberg opinion. absolutely billions on this crisis of german banking. want toally doesn't talk about this. he is with blackrock. so, swiss bank, lee does not want to talk about this as well, so let's go to the parlor talk. >> i will talk about it. tom: let's go to the parlor talk of negative interest rates. it is an x axis phenomenon. grand trusting this experience under the word chronic. we are chronically forever in negative interest rates. what is the damage of that? >> it is interesting that you say this. i was at a real estate conference yesterday and they were mentioning so much inflow

is going into the alternative side in europe right now. is there a genuine demand? is it because of negative rates and dominant -- nominal yield? short-term it sounds good. francine: when you look at some of these people, should they even look at banks? >> they do think about banks. ecb, theye for the have negative rates, they have a qe program, what do they do if the european economy turns south? strong,r market is rates and inflation are low and that would be the thing.

if we don't get that, what are the levers going forward? beative rates are going to negative for the banking system. it puts them in a real pickle. francine: tom? geoff, a brilliant summary on the wisdom of prices. world, weed income are not pricing correctly right now. the distortions you mention from your real estate conference are absolutely extraordinary. every bank has to deal with this. commerzbank cfo aggressively told matt miller he can't work with negative interest rates. can any bank work with negative interest rates? inffrey: can any bank work such a weak growth profile right

now? ultimately we have to look at the growth -- at the source problem. central banks are trying to force out some growth but if you can't identify long-term growth trajectory, the banks are going to be stuck with future lending. there is no yield curve. hence this entire debate about monetary policy. there are many adjustments going on in european banking and there is decided adjustments going on in asia and the pacific rim. it is a stunning result. mr. modi, you tell folks you know what is going on. modi wins but modi wins big. we will discuss that in a moment. futures at -27. this is bloomberg. ♪

tom: good morning. francine lacqua in london and i am tom keene in new york. we need to tell you about our limitations of broadcast on the united kingdom election. a reminder in the united kingdom and netherlands, they are voting today in the european elections. we are not permitted to discuss any election related issues due to the united kingdom regulations, until the voting stops at 10:00 p.m. london time. that is 5:00 p.m. in new york. we can't even talk about 10 downing street. the body language of the cat.

we can't talk about it. we've got lots of experts like scott teal and geoffrey yu. shock in india. our guest joins us from bloomberg news in mumbai. a huge victory for mr. modi. why was this a surprise that mr. modi won so big? >> this is a spectacular victory. thatpolls were indicating the prime minister's party was going to win. the magnitude was a bit underestimated. seatsg in on nearly 300 in parliament. all you need is 272. they are comfortably above that mark. reassertsster modi himself is the most dominant

politician in this part of the world and the most popular one as well. acrosseal has expanded community lines. loudly andll spoken clearly, that they want prime minister modi back at the helm. to 1947,history back how will this play with the minorities of india? minorities, the religious minorities. how will this dominance of the hindu centric approach play? >> i have grown up in an india that has always celebrated diversity. in the last five years that prime minister modi came into office, that idea of secularism a strong sense of

religious nationalism. i think in the history of clearlys, this verdict indicates there is a fundamental shift in the politics of this country and what the people of this country want as the primary ruler. you are right, the concern for religious minorities will persist but prime minister modi just tweeted that he believes together we will build a stronger more inclusive india. francine: what will the next five years, how will they thermine how mr. modi uses political space you're talking about? will india be the next china? this could open up the possibility of muscular policy from the reserve bank. only part of the question

that is important, why this has been a strong verdict in favor of mr. modi. it has decimated the principal opposition party and that is not good news. a week opposition, that is a fear. the economic challenges the new government faces are enormous. there is a farm crisis. there is a serious jobless growth. we are also facing the prospect of a slowing economy. growth, theit of fear would be if the economic minorities and religious minorities are also equally hurt, that is the concern and the fear. it will be up to the government to figure out how to take steps moving forward. the tagline for this government

as they take everyone along. francine: thank you so much for newspdate, bloomberg executive new -- executive producer in mumbai. information onre the election results on your bloomberg terminal. scott teal of blackrock and rey yu ofou -- geoff swiss bank. it has a positive momentum for sentiment and a feel around investors and reform and fixing the banking system it is positive for investment in india over all. be delivered to see the stock market move materially higher but things like private

credit in india, there would be a lot of money flowing into india. wascine: mr. modi disappointing a bit under reforms. why is this time different? geoffrey: i think the hope for markets is that it is done in the right places. scott was talking about the banking sector. india, australia recently and maybe indonesia have shown, elections, people reform.see economic politicians who run on economics. tom: it ties into both of the -- both of their areas. we will talk to geoffrey yu and scott thiel about inflation. it seems like the trend of disinflation and what we see out under the two year yield

two point 19% in the united states. yields remarkable -- under 2.19% in the united states. joe crowley is joining us. this is bloomberg. ♪

sebastian: this is bloomberg surveillance. qualcomm is looking into the appeals process to recover from a major legal setback. a federal judge has cited in -- cited with regulators any antitrust case. they may also get help from the trumpet administration. -- is looking for strategic buyers. some buyout terms are balking at the high price and slow pace of the deal. a minimum value of $33 billion. the company has held talks with tencent but the u.s. trade war could put an end to that. seb.ine: thank you so much

the u.k. and the netherlands are voting in the european elections. we are not permitted to discuss election related issues due to u.k. regulations until voting actually stops at 10:00 p.m. london time, 5:00 p.m. in new york. issues including brexit cannot be talked about. tom: i am going to turn as we do with futures, -28. real news is the correlation of the market yield. the two-year u.s., 2.9. all of the usual victims. the yen puts out a modest bid. scott deal with us of blackrock and geoffrey yu of ubs. chart is asked -- absolutely grim.

here -- what is the why here? scott: expectations around rick's off -- risk off which is driving -- that begins to start to feed on itself despite what we got from the fed which is clearly transitory, patient. we are ignoring that at the moment and focusing on the risk , recalli would note when trump originally interjected this volatility in the market around the u.s.-china trade relations. cross market volatility was at multiyear lows. in some respects, you had low volatility, high expectations. the theme yu, this is yesterday, the idea that you

could wish inflation higher. what i am wishing for is that europe did not look so much like japan. how japan is europe on a thursday morning in may. toffrey: right now, you need nomics style move in europe. they see no prospects for investment. you need to change the narrative. buts harder and less modern there needs to be a new but coordinated central bank plus fiscal narrative in europe which can turn expectations around. changes, thetain bar is so low right now. targeting --uld eb should eb be targeting inflation or something else? geoffrey: it is hard to say.

scott: there is a long-term -- there are a couple things at play. there is a deflationary environment related to technology and generational issues and there is also the shorter-term. the long and short of it is we should talk about it but it's not going to happen. tom: scott thiel of blackrock and geoff yu, thank you as well. lots of gyrations in the market. merengue on the equity markets. he will go in search of value. this is bloomberg. ♪

tom: we have big plans and we

have to remain a global player, as shareholders sell shares. there will be resignations perhaps. this sunday there'll be an eu election result. will the prime minister greet president trump in 11 or so days? will president trump ever again ofdially greet the speaker the house and the senior senator from new york? this is bloomberg surveillance. i am tom keene in new york with francine lacqua. a huge win in india for mr. modi . it is the surprise of the season. francine: we have been trying to figure out exactly what it means for the economy, investors,

rallying on the back of that landside -- landslide win. need to understand how they will fill the political space over the next five years. a reminder for the u.k. because we are having elections. as the polls are open, we are not permitted to discuss in the election related issue, including brexit do these u.k. regulations until voting stops 5:00:00 p.m. london time, p.m. in new york. tom: right now in london with -- "first word news, here is "first word news," here is seb salkek. an escalation in the u.s.-china trade war could see demand holds for even longer. isindia, prime minister modi

set to win a majority in his own election. he had easily won the 272 seats in parliament. more than 600 million voters cast ballots, a turnaround -- a turnout of about 67%. u.s. official says deployment would be for defensive purposes. an aircraft carrier group was already sent to the region. -- the former chairman appeared in a pretrial hearing today. allegations range from falsifying financial records to redirecting company money into his own account. a warning to deutsche bank employees. the ceo says far-reaching trades are needed, including a cut to investment banking. he highlighted businesses were cuts are unlikely such as

foreign exchange, global credit-rating and u.s. real estate. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am sebastian salek, this is bloomberg. tom: data and more data checks with a real risk off field. features at -30. stronger.llar two big figures. , lower in yields by three basis points and i put up sterling, eurosterling. he is monitoring sterling and i am monitoring what is happening over all the european markets.

investorse flopped, were worrying that trade concerns will deepen. i wanted to look at sensei which was really rising on the back of that victory by modi. tom: very good. let's go into the bloomberg terminal and look at an intraday chart of deutsche bank. it is an ugly sight. a big gap drop here off of the general meaning. this is a pendant. at 6.4, not pretty and looking for a transformation. our guest joins us now, she covers so much of this for us out of london. what is the distinction you see in this annual meeting? >> for one, this is been one of the most anticipated annual

general meetings in recent memory, for deutsche bank for certain. this one was -- this was one where the commerzbank acquisition unraveled this year. deutsche bank shares are down about 40% in the past year. profitability has been an issue. shareholders have been losing patience and today, a day of reckoning in a way for the ceo to signal what's ahead and what shareholders can expect going forward in this journey which has been grim. francine: the bottom line is he is cutting cost in the investment bank. he has done that in the past. people know that is a problem. what does he want to be? therein lies-- >> the dilemma for some of these ceos for european banks. deutsche bank is emblematic of

all of these issues that are facing european banks. in the case of deutsche bank, the problem is twofold. unitave investment banking that has been holding back profitability for a long time. they cut -- if they cut -- if they cutback too much, they lose their significance and their ability to compete with their u.s. rivals is further eroded. it is a balancing act for sewing. the first line of business for him is to jettison units that have been unprofitable. ?rancine: will the chairman go a lot of shareholders just want him to go and find someone new. would that help? helm for been at the more than seven years at this threeand he has overseen ceos coming and going and as

many turnaround plans. amongis an impatience shareholders. and even regulators who are normally very silent on the issue. some seniort that officials have suggested that it would be a good idea for him to leave. what that will achieve in a way is a sense of decisive nests -- decisiveness. media inoken to the the past, saying the bank is committed to the investment banking unit. perhaps investors view that as a sign that they will be -- that they will be somewhat more decisiveness. thank you very much. turning to trade, beijing is announcing u.s. action as the trump administration debate whether to blacklist more chinese tech companies. some of the biggest financial firms are getting increasingly

pessimistic. made newer high duties their baseline forecast. joining us now is christopher marangi. the mood seems to has shifted. the baseline is this trade war is here to continue. what are the implications? christopher: there is a settling in of the belief that this trade war is going to go on for many , the or at a minimum dispute with china is going to continue for many years whether we get some kind of agreement or not. tom: guys like you are value guys. sheriff --frame tariff trade, china, the world ?oming to an end

christopher: you focus on the fundamentals. tom: what to the fundamentals tell you? christopher: fundamentals are in good shape. good, valuation is not stretched. tom: david herro is getting hammered. does the gabelli shop the mother of all values? do you go for cheaper u.s. bank stocks or do you take the moonshot ever higher? christopher: historically we have been underweight the financial sector because they are subject to periodic blowups whether it is the em crisis or the mortgage crisis. when it comes to european banks, we are not really involved. we are monitoring the situation with deutsche bank to the extent that there are structural risks that could have broader implications.

francine: what is your biggest concern away from trade? christopher: trade clearly is number one the stay -- these days. teresa, and we can talk about that. tom: who? christopher: and treasuries. treasuries have taken a bit of a back burner. i think the focus really is on trade and how this plays out. francine: are you worried that china will weaponize treasuries or do you worried about -- worry about a sudden repricing? chinese couldhe push that nuclear option and dump their treasuries, but that seems unlikely. at theore just looking impact of interest rates on the real economy and the pricing of other assets. tom: futures -30.

let's bring up that chart. chart andeutsche bank also euro stoxx. this is the blended european bank stocks and deutsche bank failing so miserably. how heavy is individual stock selection? what is the waiting -- weighting? christopher: macros are important. you can't just stick your head in the ground and pretend what is going on in the world isn't happening. clearly trade is having an impact on companies of all sizes, but the focus is, you can find companies that have less exposure than china. you think about a lot of the domestic cable companies. charter communications, a large cable operator, virtually no china exposure. it is an regular did utility. -- it is an unregulated utility.

with us, muchangi more to talk about within the hour. attsche bank here trading 6.42, distant from the 6.60 of yesterday. coming up, mark cooper will join us, the chief executive officer of jb solomon. look at that -- look for that in the 3:00 p.m. our. this is bloomberg. ♪

sebastian: this is bloomberg surveillance. u.s. aviation regulations will not rush the boeing 747 max back to the skies.

the federal aviation administration will discuss a remedy boeing is proposing. hasan stanley says tesla grown from a growth story to one that is about restructuring. adam jonas says supply exceeds demand of electric carmaker. nobody cares about the model y. wearable creating a voice device that can recognize human emotion. they describe it as a health and wellness product with software that can determine the user's emotional state from the sound of his or her voice. thank you so much. christopher marangi with us of gabelli. i am trying to figure out the amazon emotional device with

like a 12-year-old. what is it going to do with kids in the house? is that where we are heading? christopher: followed by a shipment of some alcoholic beverage for the parent. jeff bezos is already listening to everything we are talking about. it is a great product. tom: do you own amazon shares? christopher: we don't on the value side. tom: how does buffett by a value stock? christopher: it was not necessarily warren but some of his associates. tom: futures at -31. this,ne: when you look at is it an amazon story or more about ai? does really change the way we use ai and robotics? christopher: that is an excellent point.

it was followed by news yesterday that comcast was developing a device to monitor health in the home. it could be a lot of companies who are after this. tom: may be an emotional device in the oval office of the white house. joining us now, viviana hurtado with a look at the festivities yesterday. the link between the executive, legislative and judicial branch. the backdrop is a judge comes out with a ruling, a judge comes out with a ruling. what will be the result when judge c comes out with a ruling in the coming days? it comes down to the trump administration's argument of executive privilege. i remember this with the second bush administration, there was a debate about executive privilege and governing by executive order. what is interesting is that right now and the political

context in which we are living , theresident trump democrats in the form of nancy pelosi and chuck schumer as well as some influencers in washington like lindsey graham are really walking tight ropes. what this is going to have his political implications not just inside washington but throughout the nation and as we have seen with the election of president trump, it is going to be felt the world over. tom: what is the state of the white house right now? they had all the festivities in the rose garden and have to pick up the pieces today. what is the state of the legal team around president trump right now? viviana: it will be consistent with what it has been or i will suggest it should be consistent with what it has been up to now. the president's legal team is going to be aggressive about exerting this executive privilege and moving that forward. what it basically means is that the legislative branch is going to continue to do its job.

the big question going back to this tight rope is will the president be able to go on with the nation's business or if he continues to be bogged down with these kinds of political brawls, is it going to be perceived by voters as the president serving his political fortune? francine: thank you so much, viviana hurtado with the latest from washington. getting a little bit of news on tesla. this is what we have been looking for in the last couple of days. they nick -- they have a new chief marketing officer. was verymeme that popular and he got picked up by tesla. this is expected to be the seventh day of losses. premarket tesla down 4.4%. tom: the chart is beyond ugly. below 200. the newdown here to

unimaginable 184, down 6% today. that important six year benchmark paper now has an 82 price. stay with us. this is bloomberg. ♪

francine: this is bloomberg surveillance. to all of our international viewers that the u.k. and the villains are voting

in european elections. as the polls are currently open, we are not permitted to discuss any election-related issues including brexit do u.k. regulations until the voting stops on london ground. we are back with chris marangi of gabelli funds. a great chart that encapsulates the concerns that the fed has over inflation in the u.s. we have core pce in blue. when does that go up? a lot of people were expecting that in the second half of this year but what needs to happen for that to be realized? christopher: certainly the tariffs will contribute to that. expansion so of pce or prices getting more expensive because of tariffs. that is not the kind of

inflation the fed is looking for. it has been this issue for many years, this conundrum of pretty robust employment but it continued slack in prices. it is a problem that gives the fed its inflexibility. if the trade war increases from now between the is itnd china, deflationary? christopher: obviously it has implications for employment and production with regard to exporters. -- talks about the new policy paralysis in washington. is this a fed in policy paralysis? christopher: it would seem that way. the fed looks like it has been taking cues from the president. i know that is not the reality for cherub -- for chairman

powell or at least the reality he would like to project but that is the market perception. tom: interesting to see. near.9 is getting mr. marangi with us and we will speak on the equity markets in a bit. coming up, an important conversation with what we saw yesterday from the speaker of the house. let us speak with a democrat from the new york -- from new york, joe crowley of new york, a former congressman. we will speak about affairs in washington. this is bloomberg. futures -29. ♪

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. tom: good morning everyone. look at the want to washington policies.

we can do that through the synthesis of queens. queens is a modest bureau east of manhattan where joe crowley grew up in a very political family and the former congressman of the 14th district and the former democratic caucus chairman. we are thrilled to have him this morning. i want you to do -- i want you to inform our global audience about the german from the 10th district, tell us who jerry nadler is. joe: i have -- gentlemen from the 10th district, tell us who jerry nadler is. joe: i've known jerry nadler from my days in the new york state legislature. jerry was the chair at the time of a committee that i served on. i have known him. jerry is a very deliberate person. he is someone who believes in the law. he does not believe in persecution or prosecution for persecution stake --

persecution's sake. that is just too we is. tom: long ago and far away, you are free trade, speaking to the republicans in queens at the time. you supported moving against tpp with president obama. inre is that mix right now your democratic party between a center tendency, a joe crowley tendency and the new democratic left? joe: it is a bit of a flux going on. the president is in no small part playing a role in this. we have seen a growth towards the left but at the same time, we have to remember and keep in mind how democrats won the house of representatives. it was not by winning my district, it was in districts where democrats actually took seats from sitting republicans

or open republican seats. that is the middle of the country, the breadbasket, the rust belt, places like pennsylvania, iowa, florida. texas and elsewhere. that is where the growth took place. seat to: you lost your aoc, is there still room for moderates in your party? joe: i think it is the moderates who won the house of representatives for democrats. not in seats where it was democratic primaries that when the day, it is in those districts where it was a fight between -- discussions and whether moderate republicans or independents could sway -- those are the districts where democrats won and that is where the presidency will be won as well. francine: do you have any plans

on running against a convio cortez -- aoc? joe: i have no plans to run against her. i do not what my political future holds. tom: let's get back to the new democratic party, that they need to win coast-to-coast and that can be described on east 57th street in new york. you and i can go down and have meatloaf and corned beef and that is the old politics you grew up on. how desperately does figure pelosi, senator schumer and the other democrats have to get back to the politics of jimmy neary? joe: there do -- there is a role and a place for all of that. i think the house of representatives is a very collegiate body. one where you have to have cooperation amongst your colleagues. that means democrats and republicans when they are trying to get something done. it starts in each of the

caucuses and the democratic caucus and republican conch -- conference will be able to work together to move forward. pin you down, one of the most qualified people to talk about this, did new york city blow it by pushing amazon out? joe: i think it was unfortunate that we lost those jobs in the future for what i was developing and hoping for, a tech center for the northeast. we had seen what michael bloomberg had done in terms of with 90'sde island quit -- $90 plus per square foot in manhattan, the growth was in western queens. i still have hope for that but this was certainly a blow. i blame amazon. they should have stuck it out. there was much more support for amazon in queens. mr. i should note that

bloomberg is principal owner of bloomberg lp, the television and radio station as well. francine: what do you think the democratic voter wants in 2020? what are they looking for? what are the policies that will pull at their heartstrings? joe: they are looking for thislity and right now president is offering a lack of stability for the country and the world. they are looking for health care that make sure their health care is in place, that they like and can keep it. did -- one thing the affordable care act did was expand health care and democrats want to expand that and make sure even more people are covered. tom: former congressman of the state of new york, joe crowley, always of queens. right now we go to london for the "first word news." sebastian: china is making its

position clear, it has no intention of making concessions to the unit states to restart trade talks. if talks were to resume, they say the u.s. needs to correct what it did. they blame the u.s. for escalating the trade war by imposing tariffs. the u.s. blames china for backing out of a deal that was already settled. john walker linda's being released from a federal prison. he received a 20 year sentence after pleading guilty to helping the taliban. he is getting out a few years early for debt -- for good behavior. for democrats investigating president trump, it is a second courtroom win. a judge rejected president trump's demand that his banks do not release his financial records. india, prime minister modi et

cetera win a majority of his own. modi's ruling party has easily won the 272 seats in parliament to form a government. more than 660 million voters cast ballots. -- global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. we are getting a little bit of news from the spokesperson of theresa may. that is in the context of the fact that we cannot talk about brexit because there are eu elections underway. he has confirmed that the u.k. government will announce a replacement today. the prime minister is looking forward to welcoming president

trump in june to london and that they still plan to hold that brexit vote on june 7. we will have more from the u.k. later. this is bloomberg. ♪

tom: bloomberg surveillance. francine lacqua in london. i am tom keene in new york. -27 on futures, dow futures -231. 10 year yield in a full three big figures. always very coordinated and collated in his look, christopher marangi.

can we do a chart that would make mario cavalli happy? christopher: -- mario gabelli happy? christopher: absolutely. tom: the ugliness of 1929 out to the 30's. up we go through the carter days. what is your average holding period? christopher: our turnover is 20%. that is a five year plus. tom: what do you do different from year two to your four -- year four? christopher: we look at private market value for an enterprise. we look at our margin of safety. if the margin expands we will add to it. if it's rings we may trim it. we are looking -- if it shrinks, we may trim it. me about talk to

tariffs on u.s. goods. do a lot of these companies automatically put prices up for consumers and what does that mean? christopher: it brings forward an important point which is what is a company's pricing power? services thatnd will be able to push that out to the consumers. obviously this is going to play out over some time. companies may be reluctant to push prices initially but ultimately this will be a tax on the consumer. prefere: would companies to take a hit on margins because it may hurt demand? christopher: obviously it is case-by-case. francine: and sector by sector. christopher: sure. tom: where is growth now?

i look at consumer stocks and theing and the rest of gloom around that. how would you and gabelli defined growth? christopher: growth is an element of value. you could have a growing company that is a value stock if future prospects are being undervalued. we think there is some confusion about what is a growth stock or a value stock. we talked about berkshire hathaway buying amazon. they are both stocks that would be considered growthy. we are not allergic to growth. we just want -- we don't want to pay for it. tom: the pe on amazon is 68. the pe on google is 16. christopher: those two numbers

don't necessarily say one is a goodbye. tom: that is a view -- that is a mystery for our viewers. how do you measure the growthiness of a value proposition? positioner: what their is and how they can attack it and ultimately what the value is going to be and you compare that to apple and all the issues they may have including china for example. you weigh those and figure out where you're going to buy it. christopher: -- tom: i just had a nightmare of mario gabelli talking about the faang stocks. chris marangi working for mario gabelli. coming up today, we just talked to joseph crowley of new york, eric slough well of california, he will be with david westin at the 12:00 hour. this is bloomberg.

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sebastian: this is bloomberg surveillance.

qualcomm is looking to the appeals court to recover from a major legal setback. a federal judge has sided with regulators against the chipmaker in an antitrust case. they may get help from the trumpet administration. the government is eager to ensure qualcomm stays competitive in 5g technology. -- is open for business in paris. the collection is described as menswear inspiration with a feminine twist. that is your bloomberg business flash. tom: a girl like me came out and i was blown away by this talent. what is she doing now, clothes? francine: it is apparently groundbreaking. the collection is based on menswear but for women. given the way fashion is going, a lot of analysts say it is

going to be popular. tom: really? to me.s like fendi right rally -- right now we know tesla is tesla. our guest joins us from bloomberg intelligence, not only an expert on bonds but also has a wrench to do with that under the hood. what is under the hood at tesla? how grim is it? kevin: what we are more concerned about is how real is the sustainable demand going forward? there was a lot of noise with capital raises and elon musk's personal situation, also with enough capital to get him through the extended period. demandstion is, is the growing and that is where we are

unsure right now. tom: partial differentials of revenue. does lower-priced sell more units? hasn't and you have to keep in mind that the federal tax credit has stepped down. while at the higher price points $3750 doesay well not make that much of a wealthy,e to the maybe it makes more of a difference at the model three because that sequential drop-off on deliveries from the fourth quarter of 2018 to the first quarter of 2019 was the most of any automaker. kevin, if you look at the pre-trade, it is dropping. how unusual is it to lose that much market share or that much

valuation? isin: the interesting thing there is probably a lot of investors that have a lot of profit already locked in and as you see the stock tumbling, you wonder what the reaction is going to be and how far will this come down. if you are in that early ipo stage, it traded under $100 for a long time and the shares spiked on the model s deliveries. are in reallyho low start getting out, you are not going to buy back in. if it is overvalued at 380 and 280 and 180, you are looking at a worst-case scenario or you are going to have investors looking at it saying i was buying them when it was above $200. i'm going to hold down to see how this plays out. thatine: one of the things

one of the analysts is saying is the automaker cannot avoid the trade war effect. that must be true for all of their competitors. kevin: sure, and we said this all along. the worst case scenario for tesla is to be considered or valued as a legacy automaker. it has been positioned as a technology company. when you start to see normal automotive factors affecting the company, that is a worst-case scenario. they wanted to be different. they are a disruptor. the things that affect legacy automakers are not for tesla and when you see that start to happen, that is the biggest concern. francine: thank you so much, kevin tynan of bloomberg intelligence. bank, thethe deutsche changesecutive saying and cuts are coming.

bloomberg sources say many lenders say the owners want to see the chairman gone before his term officially ends in 2022. a series of botched turnaround efforts by commerce have also seen seen -- have also seen the stock plummeted in recent months. joining us now from agm is our guest. the chief executive was saying he was going to do some cutbacks at the investment bank but will that be enough to appease shareholders? >> certainly not. coming out of that meeting now after christian sewing spoke there, shareholders got on stage and you can see and feel the frustration and anger they had at the supervisory board for what has been going on for the past seven years. . and since the chair has been at the rain, shares have fallen 70%. one shareholder complaining it is cheaper to buy a deutsche

bank share in germany than it is to buy a pack of cigarettes. they are going to have more cost cuts, more to the investment bank and you can see it did not move the needle at all. it is the same playbook from the ceo, more cost-cutting but want -- but what shareholders want is revenue growth. tom: you are absolutely right. the chairman had a headline out that they want to be a global player. aes mr. sewing one to be global player question -- want to be a global player? question, oned that is part of the debate between the chairman and ceo. it does not seem to be working and i think they are taking on more of what shareholders are saying. investors have all said the investment banking unit needs to go. there needs to be a massive overhaul. that is the unit that is a sore

spot. the fact that it pays out massive bonuses, has all of this capital expenditure yet out of all three divisions, it is the one that cost the most and does not make much money. the one thing they want to keep is u.s. real estate and global trading. tom: that would be good. this is critical. what is the win of all of this? when do they rationalize investment banking? when are they actually rationalizing investment banking? the question remains to be seen after this agm is where investment banking is going to cut. one thing they did omit was the equity business. someone close to the matter said that was omitted person -- purposefully. is what isain thing the timeframe for this? the markets did not move on this and there are a lot of questions this iscuts and where

coming from. these are the questions that remain to be seen. this confidence vote today, how will the supervisory board do? -- it would be hugely embarrassing. tom: get a plane flight back. i want to talk to you. we need to thank chris marangi of gabelli funds. features at -28 and a risk off feel today. stay with us through the day. this is bloomberg. ♪

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. ♪ trade though from bad to

worse. china calls u.s. a troublemaker. shiftconomists start to their baseline to a full on trade war. patient, patient, patient. the fed reaffirms its patient stance. deutsche bank promises far-reaching changes. the ceo promises a tough cut back and promises to accelerate transformation. markets unimpressed. david: welcome to "bloomberg daybreak." best buy earnings are coming out even as we are talking. it looks like earnings-per-share beat quite a bit. alix: comp sales were a beat. they are raising their guidance for the second quarter and full year earnings, and their margins are better. , and thet surprising pr