done. a fall from grace from the start of darling. slow down like it's 2012. germany hit with the worst slow 2012.ince in prime minister narendra modi takes texas by storm with praise from president trump. we talk about one of the largest investments into u.s. infrastructure. if you live in new york, remember, you are not going to be i -- going to be able to get anywhere with cabs. s&p futures go nowhere. can we reach a new record? that is the question if you are in the equity market. part of the market is about go buy bonds. the euro is a bit weaker due to terrible pmi's.

time now for global exchange. we bring you today's market moving news from all around the world. joining us from hong kong is enda curran, from saudi arabia we have in dipaolo, emma chandra from london, and bill faries in new york. a chinese trade delegation calls off plan to visit to american farms, according to people familiar with the matter, but the chinese official says the cancellation isn't indication of a negative turn in talks, saying negotiations on the agricultural area went very well, and the two sides held throw in candid communication. enda curran joins us from hong kong. give us the latest. enda: it does sound as though signals from the chinese side are very much that they want to manage expectations on track that they are making some progress. we had the commerce ministry on saturday making the point that

talks with mid-level officials were quite constructive, and colleagues in washington are reporting that the next level of trade talks will happen around october 10, when china's vice premier will travel to meet his counterpart. despite what happened for the visit to the farms that was meant to happen, overall trade talks remain on track for now at least. alix: thank you very much. oil is ending its best week since february. the u.s. now plans to send extra troops to saudi arabia as the country tries to shore up its damaged infrastructure. anthony dipaolo joins us from saudi arabia. what have we learned about where saudis are and rebuilding their oil infrastructure? anthony: good morning. the saudis made some very positive comments about that last week, saying they are moving pretty quickly. they want to bring back the full

capacity that was interrupted by the end of this month, so that is a really soon turnaround. the damage was considerable. these are the key units for those refineries. until they are repaired, those crude processing facilities cannot run. that has created a lot of skepticism among analysts, among oil industry professionals, that saudi aramco can do those repairs as quickly as they've said, so that is giving a little bit of juice the oil today as people are skeptical about the pace of repairs and the pace that aramco can bring that supply back to market. alix: thank you for the update. economic activity sees the worst downturn in almost seven years. service is starting to roll over as well. emma chandra has more. activity isy

shrinking at the fastest pace in around about a decade. we also saw weakness in the services sector, adding to seeing itat you are move into services. we seen plenty of evidence of that over the last few months or so. that is really impacting european equities. you've got the dax off by more than 1%, but we are seeing a risk off sentiment across europe because the pmi data was weak in france and the euro area as a whole, but it is germany that is most concerning. the engine of the european economy is really export oriented, and what has been impacted by is trade challenges to the auto industry and by brexit. all of this data adding to concerns that we are going to see germany fall into recession, and amplifying calls to see fiscal stimulus. alix:. about -- alix: thank you very

much. about 200 world leaders will be gathering in new york for the u.n. general assembly. iran tensions will be high on the agenda. >> i am not confident that we can avoid a war. i am confident that we will not start one. i am confident that whoever starts one will not be the one who finishes it. alix: president trump will be speaking tomorrow as well. newburgh's bill -- bloomberg's bill faries joins us on the phone. what is going to be the behind-the-scenes conversation when it comes to iran? bill: we know president trump has said he's not close to the door -- he's not close the door to meeting with president rouhani of iran. it will be difficult to pull off, but on the sidelines, we know that people like emmanuel macron of france and some of the other european leaders are going

to be working to try and bring both sides together. we've had a slight easing of tension very much on the margins today, but iran did release that british tanker it had been holding for several weeks. that will help the europeans make their case that if there is any good time to find a breakthrough on u.s.-iran tension, it is this week, when iran's leaders and president donald trump are in town for the same event. alix: also, it feels like the conversation is revolving around climate change and policies in germany getting front and center on friday with their planned 54 billion euro to fight climate change. how is that circulating throughout this u.n. general assembly? climate isocus on what the secretary general is trying to get. he has said he will only give the podium at today's event to countries making serious commitments, that come up with new money or new plans.

the most interesting parts of today summit is who is not going to be there. key leaders are on that list. andil's jair bolsonaro president trump. he has said he has other things to focus on today. alix: another story i am watching to morning, thomas cook's collapse. the 178-year-old travel company filed for insolvency today. bookings, flights, and tours were canceled. the british government plans to charter planes to bring home more than 150,000 stranded customers. check this out. if you complain about your travel, look at this. one woman tweeted about her wedding getting messed up. she says, "our wedding and guests are booked with thomas cook, and leave it to say i am absolutely gutted. we literally woke up to go to the airport when we found out." that is a really rough pre-wedding day.

coming up on this program, we are going to have more on your morning trade and analysis on the markets in today's first take. this is bloomberg. ♪

alix: time now for bloomberg first take. you're going to get the trades and the analysis of the markets. bloomberg is gina, chief equities -- is gina martin adams, bloomberg chief equities strategist, and vincent cignarella. german start with those pmi's and services numbers. what are traders talking about this morning? sense, this dollar

trade just won't go away. the u.s. is the economy of choice. it's time for fiscal stimulus out of europe, and it just sub -- it just doesn't seem to be coming. why bother buying into a currency or asset class that doesn't went to seem to help support itself. alix: but no problem buying btp's or bunds. vincent: bonds will continue to gravitate higher, even into negative territory. i'm afraid this trade is going to unwind rather badly soon, but not for me to try to call exactly when, apparently. alix: fair enough. in the meantime, values keep getting cheaper in europe. gina: frankly, i think you hit the nail on the head when you said no surprise services are about to turn over. i am surprised the markets in europe took this so badly. alix: really? they thought services were going to hold up.

gina: i think we've known it for so long. pmi'se talking about the being awful. here we are in september, and it is still a risk to equity markets? we've had nine months to absorb this deterioration in economic growth. two to three weeks ago we were talking about maybe getting a fiscal package out of germany. i think we know this now. it is just a matter of when it will stabilize and what it will take to stabilize. i think that partially explains what is happening in the u.s. market. there's no huge weakness emerging. i'm just a little shocked that in europe, it was such a shock. damian: to see services pmi's rollover was another thing. for services to rollover leads me to believe that maybe we are going to see consumption get hill little bit, and that might -- get hit a little bit, and that might start to pick up recession risk. if you look at u.s. equities at all-time highs, you tell me.

the change from growth to value and defensive to cyclicals will tell you. gina: u.s. equities are on all-time high risk premium, so it is not as if u.s. equities are trading at all-time highs because everybody is incredibly optimistic about the future. we are trading at all-time highs because investors have piled into defensive equities, have piled into bonds, and the world is awash with tons of cash. so it is an odd environment because it is really difficult to price where things are. one thing i can say with certainty, investors are not optimistic about the future, even though equity prices are pretty high in a vacuum. relative to everything else, they still look extremely cheap. alix: and what happens when services pmi takes over in the u.s.? indication,many is that is kind of my point. you saw jobs in germany start to kind of rollover. why would the u.s. be immune?

gina: it is not. the other thing is services pmi is not a leading indicator. this is a lagging indicator. it reflects what is happening with retail sales, the last leg to ultimately fall over. there's a bloated idea that the u.s. is infinitely going to offer some sort of stability in the global economy, that the u.s. consumers going to hang in there and keep us all afloat. the reality is, and this is increasingly priced into the market, we are turning over into some period of economic weakness. we are now looking for when the economic weakness starts to find a bottom. i think that is were afflicted in prices. damian: i think what is your baseline forecast over the next 12 months, where are equity valuations to go? to me, what is interesting is the quality premium. it is really not just equity. it is also into credit markets. 'sc's participating with bbb in credit.

that makes sense with recession risk taking up. we are seeing that in emerging markets as well. it is just more par for the course. alix: before we all get super bummed out on monday by our trading experts, citi came out as a note on friday saying the euro forecast, "some damaging news appeared to be priced in, and thus anything better than bad can be a catalyst for more upside." it is a good point, but the other part is, better than bad? gocent: it is only going to one way. how many times have we heard this story before? we had the trade talks break down. everyone panic. oh wait, they didn't leave because the trade talks were bad. somebody had a hair appointment. no one is telling us why. alix: that was actually not reported by bloomberg business. [laughter] theent: it had to do with

october 1 celebrations, and things were getting tight perhaps. we are told that the agricultural talks went well. the agricultural talks have to go well. it is the only thing we are going to agree on. is that the good news we are hoping to get that is not bad news? alix: to that point, you get south korea's export data for 20 days in september. it is terrible with japan, with the u.s., with china, across the board. damian: and it runs counter to south korea being the pmi's that run into expansionary territory. it is all about dollar strength. just looking at the repo squeeze last week in the u.s., i am an em guy. if you just look at the u.s., the dollar is up on the fact that the repo markets weren't functioning well. don't get me wrong, crisis averted, but still, the dollar up is something that has catch people's eyes, especially when the same thing is happening in china. vincent: by the way, the first

news on that was the dollar down because people thought the fed was back in buying bonds, and that was qe, so we are going to sell the dollar because rates are going to come off. totally not understanding what this is all about. the: well -- gina: well, first rule of investing, don't fight the fed. i think this is what happened last week. we kept thinking, the fed definitely has our back in equity markets. then the fed said maybe we are not so convinced. i do think that most analysts' calls are going to be contingent on what happens with rates. this is an equity strategist saying this. [laughter] gina: it is half of what drives stock prices. the other half is what happens with interest rates. a once-in-a-lifetime plummet in interest rates in august is something of note that has certainly elevated equity prices to some degree. we are moving along with the

bond market because we don't have any earnings growth to count on. it really is what happens with interest rates. i think we are going to struggle in the near term with how much does the fed really have our back here. we are starting to hear whispers that maybe we are not going to get another rate cut this year. maybe the fed is going to go on hold from here. maybe we get a little qe-lite and they focus with what is happening on the balance sheet, but will they keep using rates? alix: to tie those two points together, i get how they have to do the balance sheet to take care of the repo issue. it is not qe, but it does expand the balance sheet. the weekend over was basically about how you had rate cuts pre-priced and a lot of room to go with the central banks. now you've got nothing. vincent: i want to focus on a point that i don't understand why people are looking at. the increase in the balance sheet is minimal, number one. now we are hearing people say they absolutely have to do more balance sheet risk and take on

more debt, or the fed needs to buy more treasuries because the system is kind of broken. well, at $4 trillion, why wasn't the system broken when the fed was only holding $1 trillion? what does the fed have to do now, buy $5 trillion? the whole mechanism is shot. damian: that is a great point. 3.9 trillion dollars is the fed balance sheet. itthe major central banks, is the smallest by $1 trillion. the pboc has over $5 trillion in assets. obviously, the yen appreciation has something to do with that, but in dollars, the fed balance sheet is much smaller than the other three. it is interesting. at what level makes sense? alix: to that point, we've got to wrap it up, the boj thinks they have more tools than the ecb. what else are they going to buy? [laughter]

bloomberg's vincent cignarella, gina martin adams, damian sassower. you can find all the charts we just used and more if you go to gtv on the terminal. browse the features and check it out. gtv . coming up, more on the program with mark mccormick, td securities global head of ethics strategy -- of sx strategy. -- of fx strategy. this is bloomberg. ♪

viviana: you are watching "bloomberg daybreak." google is bracing for another landmark privacy decision from the eu. courts may clarify the scope of the right to be forgotten law. the court is questioning if the right should apply globally. the court could reach a decision as early as tuesday. saudi aramco naming more banks

to work as book runners on its ipo. bloomberg has learned they include barclays, bnp paribas, deutsche bank, and ubs. it may eventually take as many as 15. that is your bloomberg business flash. alix: thanks so much. the german doom and gloom here. europe's largest economy seeing its worst downturn in almost seven years. manufacturing slump deepens. factory pmi's drop. services start to roll over. joining us from toronto is mark globalck, td securities head of fx strategy. how do you look at this data? mark: i think you already highlighted one of the most important points, the slowdown in the service sector. we've known for a while that germany and global manufacturing has been in recession. now we have confirmation that there is a slowdown coming into the service sector. fore is still no hope

german lead fiscal stimulus in the short-term, so more pain in germany is equivalent to a weaker euro, and you are seeing that in the price action. alix: there are two rhetoric's to that. one is you will see a stronger dollar and weaker euro. but the other is that there is so much bad news baked in now, we already knew this was coming. which one do you subscribe to? mark: i like the latter. there is a tremendous amount of negative news priced into the euro right now. the way you want to frame it is kind of a stronger for longer dollar. the way you want to the about the euro is euro-dollar in itself hasn't done much. the point i would argue is the euro is probably very relevant on g10. i think that is where people are going to look for more active trades as opposed to just euro-dollar. i do think we are going to continue to find support around 1.09. alix: what are the active trades you are going to be looking at? mark: in the short run, i like euro-aussie lower. if we have a pause in the

escalation of the trade wars, that allows what you have seen out of aussie-kiwi. i think they are very attractive given that the market has priced in a lot. if you are thinking much longer term, next three to six months, isn longer, short euro-yen probably your best in terms of market valuation. alix: what struck me as interesting is australian pmi's slipped below 50. we talk about it being a race to the bottom with central banks, and it become a race to stimulus. now it feels like a race to the bottom in data. who is worse? mark: what we see in most of our tools we look at in terms of macro models, the problem is there's absolutely no acceleration in global growth. essentially, we have the u.s. looks ok versus the rest of the world, continuing to slow. i think the concern many people have as we had the massive boost to financial conditions the start of the year would start to resonate in the data.

now the consumers are slowing, so what you have is the u.s. consumer is the last man standing. the problem is while data surprises are starting to improve, we are not seeing the market on a forward-looking basis adjust its growth expectations higher. we are still stuck in this environment where it is very defensive. it is bullish for the u.s. dollar come off of the yen, for gold, for the swiss franc. we still need less fiscal -- i'm sorry, less monetary, more fiscal to move us out of this environment. alix: you and everybody else, including central bankers. mark mccormick of td securities sticking with me. coming up, investors looking for signals on the fed efforts to pull down money markets. this is bloomberg. ♪

alix: this is "bloomberg daybreak." two things happening. one, not a lot of movement. we are staying pat in the equity market. the other is that you have a huge bond buying rally.

fliputures now trying to into positive territory. you do have the dax off by 1%, but you could argue that is pretty mild considering you have german pmi and service is continuing to roll over. the weakest in about seven years. in other asset classes, it is similar. holding that level, bouncing around the bottom, things not getting any worse. a lot of money coming into the bond market in the u.s. and in europe. yields in germany down by six basis points, but holding that level. the curve in the u.s. a little flatter despite the two basis points. crude was higher earlier. that is really a saudi arabia supply driven issue. we did get weaker pmi data out of china, but holding, just there .5%. rateed's widely expected cut and forth straight day every

cooperations is all about the cash in the u.s. financial system. do investors really need to be worried? >> the rate spike looks very scary, but it is only overnight, so the actual cost to the system is not high. >> this is not going to be a long-term problem. it is more of a short-term problem for the markets. >> i think the fed and the market views that is temporary. i think it is structural, and i think the market structure has changed. >> we think it is a big deal. >> i think we've got to stay open to the possibility that this is a warning sign of things to come. >> the fed has lost control of their ability to really maintain a stable money market system right now. there's a scarcity of reserves, and the fed is not living in this abundant reserve regime. >> the abundant reserve regime the fed is now practicing isn't quite working as advertised. >> any time there is any repo stress, i think we are going to see repo rates spiked not by 100 basis points, but by 700 basis

points potentially. alix: still with me, mark mccormick of td securities. what is your take? mark: i tend to agree with the general view that comes from the td rates view, that this is a supply and demand issue. you had almost a perfect storm this week, with withdrawal coming from corporate tax, the issue about the treasury trying to issue some settlements that they had. what you have basically is demand for interest rate products and limited supply, so you see a big spike in repose. you also have the fed trying to wind down a policy it has never wound down before. thinking about the impacts to the balance sheet and the omelettes and process, i think it is also very complicated -- and the normalization process, i think it is also very complicated. this is part of a trial and error of figuring out the right policy mix to get the open market operations working efficiently again. alix: the problem is then you have that stronger dollar. how much of the dollar strength

is related to this funding issue? mark: i think it is part of it. it is obviously a liquidity drain that is very consistent with a stronger dollar, especially on cross currency basis swaps, but i don't think the innerworkings of open market operations in the money market is a long-term driver for assets. i think we get these liquidity shocks, and that reverberates through other markets. you see it correlate with weaker equity prices or a spike in risk equity appetite, but when you think about the structural issues, there is just more currency in circulation. there's more demand for services, and it is more challenging for the fed to try and match all of that. in the markets, it is also dealing with how liquidity is issued and how people are dealing with electronic trading. i would argue there's definitely a driver here that lack of liquidity can propel the dollar. i just don't think it is a fundamental, long-term driver. alix: one of the issues we talked about last week is if this is how the repo market acts

now, not even in crisis, what happens when there is a crisis? what happens when treasury issuance gets that much bigger as spending increases? even this week we have $120 billion of debt coming up due. you've got to buy your treasuries. therefore, that has a permanent issue in the repo markets. mark: it could be permanent. right now everything is done on a temporary basis. everything seems to be done a little more defensively. we see a spike, the fed comes in, they try to smooth things out. i've heard the term quantitative easing lite. this is generally, precrisis, how monetary policy works in terms of dealing with open market operations and short-term repo spikes. i think maybe the way that they pull this down a little bit more is permanent open market operations, which is something they could talk about as soon as october. the recent spike came a day before the last meeting, so i think dealing with all the challenges the fed has had to work through the last few

months, this is something they weren't fully prepared for, so i think when you think about how to reduce this, it could be a permanent facility that helps to alleviate some of the concerns about liquidity. alix: mark mccormick of td securities, you are sticking with me. coming up on bloomberg radio and tv, an exclusive interview with former new york fed president and bloomberg columnist l dudley -- columnist bill dudley. that is at 10:00 a.m. business time. now let's get an update on what is happening outside the business world. viviana hurtado is here with first word news. viviana: president trump is climate the summit at the human -- at the u.n. democrats ramping up pressure on president trump after his phone call with ukraine's president. house speaker nancy pelosi

signaling readiness to take stronger action against the president. the speaker called the president's move "a great new chapter of lawlessness." present -- and president trump says he has no intention of meeting iranian president rouhani at this week's you in general assembly -- this week's general- this week's un assembly. >> i am not confidence we can avoid a war. i am confident we will not start one, but i am confident that whoever starts one will not be the one who finishes it. this comes as the u.s. is sending more troops to saudi arabia after the attack on oil fields. iran denies response ability for this strike. 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. alix: thank you so much.

brent falling after its weekly biggest advance since february. you did have a surge in oil prices after saudi attack boosted demands from energy producing countries. with me still is mark mccormick of td securities. who are the losers, who are the winners, as there is some risk premium priced into oil? mark: the winners are your positives in terms of trade currency. norway, emerging markets, the russian ruble. on the other side, i would argue that the euro is very cyclically driven by oil, so that means when oil prices move higher, it helps euro. it is actually the reverse. right now this is positive for the u.s. dollar against the euro. in the emerging market space, this is bad for countries that import oil like india. that is kind of the standard playbook. the one thing i would argue is this oil shock has been different because those currencies aren't following their betas.

it is not helping cad or norway as much as it would historically. i think a lot of it comes down to the push and pull factor. supply shocks are generally negative for global growth. we are dealing with the overhang of the trade war tariff premium. as we just discussed, european data is still very slow. what we are seeing in some of our pmi or diffusion indices is we are still not seeing any stabilization of the global economy. with all the myriad factors driving growth in the wrong direction, and oil shock, a supply driven stock would be very bad. i think we are seeing cad, norway, those in to be high beta. this is risk negative oil shock, which is not good for global growth, which i thing is why we are seeing this kind of benefit from safe havens again. alix: that is a great point. coming that, if you come inside the bloomberg, this is u.s. five-year-five-year breakevens. that is the white line versus oil as the blue line. they tend to track each other, and they are not right now.

is that why you feel there is more of a stagflation when it comes to higher oil prices? mark: it is very interesting because the structure in markets changed. we cap oil around $70, $75 a barrel, largely because of the impact of shale. we will see oil prices essentially contained with some kind of lag as the u.s. wraps up production. -- as the u.s. ramps up production. there was clearly an inclusionary impulse that came through. concern now is even if we get supply shocks, driven largely by geopolitical uncertainty, we don't have the inflationary response largely because it is growth negative, and also because we have a cap that comes through the oil market naturally, which is u.s. shale production. oilhat context, the way the markets are working through is a lot of the normal channels have broken down. i don't think this is going to change anytime soon. the argument here is that if oil is higher on geopolitical

shocks, which, again, we are dealing with a lot across different types of asset classes , it is going to continue to contain the historical beta we saw for currencies like cad, norway, even the aussie dollar. that is generally the backdrop. it has to be growth positive to help those guys. alix: if it is growth negative in some capacity, i want to circle of this conversation we've been having together, which leads us to fiscal stimulus. if there is a growth negative shock in terms of oil, there is not the room for central banks to cut. we literally see yet versus where they were precrisis. what is your-based case for fiscal? more painink we need to get more fiscal. there is a push from the ecb. that was kind of the big thing draghi left on the table. policymakers need to do more. the central bank can't be the last driver of growth. what you are seeing is germany

announced a fiscal stimulus package around climate support, but you're talking about the $5 billion over three years, trying to a -- talking about $35 billion over three years, but you're still seeing around the margins, the more italy tries to challenge the budget, that would be growth positive. you are also seeing the rhetoric change from the netherlands in terms of whether or not we should be focusing on growth or austerity. the narrative i think is changing, but it is matching the coincidental weakness in the data. ultimately, i think what we need is more pain to get to that point, which is why we are still kind of generally bullish u.s. dollar in the very short run, largely because there's no growth coming from monetary policy anymore. alix: give got to love when you are pinning growth hopes on stimulus in the netherlands and italy, so fair point looking at the safe havens. mark mccormick of td securities, thanks a lot. great having you.

coming up, we work drama. more on that in today's wall street beat. if you have a bloomberg terminal , check out tv . check out charts and graphics and interact with us directly. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up later today on bloomberg, bill dudley, former new york fed president. now to your bloomberg business flash. thomas cook zero bonds plunging in early trading, losing

more than 2/3 of their value. thomas cook canceling all flights and vacations. the british government plans to charter planes to bring home more than 150,000 stranded customers. twitter and facebook say they've removed 365 fix accounts -- 365 fake accounts linked to the spanish conservative popular party. twitter says the accounts were identified as falsely boosting public sentiment online in spain. the accounts were active before spain's april 29 general election. deutsche bank transferring its prime brokerage business to bnp. deutsche will continue to manage the platform until the clients are migrated over. they lend cash, securities, and execute trades. i'm viviana hurtado. that is your bloomberg business flash.

alix: we turn now to wall street beat. we cover three things wall street is buzzing about this morning. first up, pressure mounts for ceo adam neumann at the board pushes him to step down. in the hedge fund turning back to investors for more money as it prepares for a market downturn. 's zurich suisse banking drama spells out after an employee moves to a rival firm. joining us is sonali basak. let's start with wework. the headline on bloomberg was neumann, new woman? what happened? sonali: it's been a tumultuous couple of weeks. but i can't wrap my head around is how fast all of this came about. softbank is one of the major drivers, and they want to keep the company private for longer so they don't have to take a right down -- take a write

-down. they now want to potential he ousted neumann. if they get rid of neumann, who is going to take over the company? will people believe that new person can move it into the public market at some point in the next year or so? alix: does it matter as long as softbank likes them? sonali: i think it does. if you ask new investors to come in, they also have to like the ceo. how much is wework adam neumann? are they very intertwined entities? they have been. not to mention, he has most of the voting power here. how hard will it be to get him out of that seat? it is very unlikely to believe he would just walk back easily. alix: yeah, i guess. it depends on how much he stands to lose if he doesn't at the end of the day. if they can't get any other loan or that $6 billion bond deal because they can't ipo, they need the cash. sonali: the journalist -- "the

journal" is reporting that some analysts say that by the end of next year, they will be out of cash. we have seen this situation before with uber, where they got rid of the ceo before they went to do public markets, but we will see if this is something they can pull off this time around. alix: in next year could be in recession, which will impact real estate holdings, which will impact the business. the second story here, elliott management is looking for a new funding round to prepare against a market downturn. sonali: just two years ago, elliott stunned wall street, raising about $5 billion in 24 hours. ft" reporting over the weekend they could raise another $5 billion. everyone keeps saying the hedge fund is dead, and every week we are seeing new launches and not small sums of money. alix: have they put the money to work they raise last year?

sonali: something interesting about elliott, our colleagues have written pulsing or is the most feared activist in the world. pretty's ignatik and how much more money they put to work compared to -- it is pretty significant how much money they put to work compared to others. they are not taking on small bets or clean ones, necessarily. paul singer is not afraid to go after bigger targets, but interestingly, this is a drawdown structure. so they don't call on the money unless they need it. alix: if you prepare for a market downturn, i remember in 2015, funds were doing that, and it never materialized. there was no huge selloff in the debt market, and they had nothing to do. sonali: exactly. , distress isfunds one thing come about activism is something that's really been something that a lot of people have been flocking to. not to mention, we keep on saying that regardless of whether there is economic

slowdown, there is still prolonged low interest rates, and some people are still looking for more alternative strategies to flock into. alix: let's get to our next story, which is bizarre. it came in over the weekend that credit suisse had a banker followed after he moved to ubs. first of all, the idea is you're not supposed to take people with you. when you leave, you can take them with you. sonali: you can't take people, you can take clients. alix: seems pretty basic. what is with the cloak and dagger? sonali: ubs and credit suisse are really a story. they are fierce rivals. this just shows how far that goes. ie story that was written would really .2 because if you read into the middle of it, there was a brawl -- i would really point to it because if you read into the middle of it, after carl brawl

icahn found out. the people who were following him try to take the phone away, and now this has gotten quite serious. this eric prosecutors are involved. thehis eric prosecutors -- this auric prosecutors -- the zurich prosecutors are involved. does a top executive at a large global bank turn around and find himself being followed by his former employer? what kind of secret did he have or clients or coworkers that warranted the following? sonali: wealth managers are a lot like investment bankers. when they walk out the door, the clients tend to go with them. that could be hundreds of millions of dollars at a time. credit suisse and ubs are the hundred pound gorillas in the world of wealth management, and they are in the same country. they are really dominating global wealth, and starting

october 1 at ubs -- alix: hysterical. i'm sure his clients must be enjoying it. coming up, all the ingredients to a dollar rally. if you are headed out, tune into bloomberg radio, heard across the u.s. on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time now for our trader's take. joining me is vincent cignarella , former trader, and voice of the global squawk. vincent: we have this really cool function on the bloomberg. if anyone wants to look, i will show it to them. what we are at now is a really good technical base for the dollar. it is one standard deviation off

its average daily close. we've now seen what the fed and the ecb are going to do. is perhaps notat cutting as aggressively as people thought. we see on ecb that basically is going to try to do more if they don't get the stimulus they want out of europe. global tensions. all of that adds up to a dollar rally story when sony people are looking for that trade to go the other way, which means it has a lot more room to run. alix: does it means being supershort in the dollar? vincent: i don't think this is about positioning so much. time tohought it was bail, so it is probably a bit more neutral. may idiosyncratic versus individual currencies. probably a little long dollar-canada, but short, dollar-yen. to me, dollar-yen is the next

place to play. alix: a lot of traders do wind up talking about how they are short dollar-yen >>. -- short dollar-yen. what dollar index level what have to be worse? vincent: i was looking at the bloomberg dollar index, and i think you need to get below 12.10. that is a support line i am looking at. alix: thank you very much to bloomberg's vincent cignarella. coming up on this program, michael antonelli, bayard market strategist -- michael antonelli, baird market strategist, will be joining us. this is bloomberg. ♪

♪ welcome to "bloomberg daybreak" on this monday,

september 23. i'm alix steel. the euro is an economy almost grounded to a halt in the third quarter as the services sector. germany, which is the biggest economy, so it's worse downturn in seven years. president trump says he has no intention of meeting iran's president hassan rouhani at the u.n. summit. iran's foreign minister issued a stern warning. >> i'm not confident we can avoid a war. i'm confident we will not start one. but i'm confident that whoever starts one will not be the one who finishes it. alix: this comes as the u.s. will send more troops to saudi arabia in response to the attack. u.k. government launching a massive tourist air left after the collapse of thomas cook. the travel company filed for insolvency earlier today after

11th hour fundraising talks with creditors failed. with.k. has now to deal hundreds of thousands stranded passengers. the wework board said to be discussing plans to oust ceo adam neumann, who's found himself at odds with the largest investor softbank. taking a look at where we are in the equity markets, equity futures pretty much go nowhere. impressive, considering we had that very week pmi data out of germany. euro-dollar obviously weaker on that, but holding around the lows of the session. a lot of money moving into the bond market here in the u.s., as well as in europe, but nothing really dramatic. we've hit the highs of the session, and we are staying there. for the equity market, it is a swing in a miss. u.s. stocks ended on a low note last week as the s&p tried to hit another record high, but got derailed because of trade talks. utilities close does it record -- closed at a record.

antonelli,michael baird market strategist. why isn't the market lower on that bad pmi out of germany? michael: i think the story of the u.s. stock market continues to be very u.s. centric. economic data still continues to muddle through. consumer continues to do well. we continued to ignore this data out of germany, this data out of asia, sibley because the u.s. consumer is in a good spot, and the u.s. consumer doesn't get sick from abroad. we continue to muddle through. stocks continue to do well. look at all of the stuff that was thrown out last week. i think that is a good sign. alix: that is a good point. u.s. equities saw their biggest inflows ever. but what is leading it?

take a look at this chart on my terminal. the utilities ended friday on a record high. we know the story. record high valuation versus the s&p. do you feel good about a rally driven by utilities? defensive sectors have definitely led this entire way. utilities trading where they are is something astonishing to me on evaluation basis. if using about what is driving the u.s., some of these consumer sectors are starting to perk up. look at the positive index they get tossed around from time to time. better thanly doing it has in the past three or four months. we like to see more cyclicals for sure, but we are ok with some of these consumer names doing well. it might not bother you,

but are you going to add more utilities here? are you picking up telcos at the bottom -- picking up cyclicals at the bottom? michael: if we ever get a trade deal, it will be some sort of light trade deal. we look for cyclicals around earnings season when they start to do better. maybe they see a little bit less headwinds. we don't add dramatically to utilities, but we still like the sector. alix: are we looking at a crisis level for certain areas of where they are trading? if you come inside to bloomberg, this is the equity risk premium. shows how much recession or crisis scares would be priced into the s&p. dovetails with tobias look of it -- with tobias let coverage talking over the weekend.

"anything better than bad can be a catalyst for more upside." where do you see the biggest disc elation -- the biggest dislocation of crisis fear in the market? michael: banks would be the ,ltimate example of this space and some of the high international exposure stocks. if things got a little better at the margins, you start to see a turn out of germany or asia, people would be piling into the fedex or banks of the world. we are looking for the u.s. to continue to do well, to continue to muddle through. all we are looking for from the administration is just a little bit of help on the trade front. the quieter it gets, the better. just quiet would be enough. banks would be the place we would look if we really think global growth is going to turn. alix: so in the growth versus value trade, what can we extrapolate from that? michael: we looked at that a lot over the past week or so. and it comes down to it, i am ok

with these little factor blowups. to me it feels like euphoria is not in this market. when you get these smash evaluation moves against hi gh growth stocks, i'm ok with that. you would expect the yield curve to steepen or inflation expeditions to go up, and that just hasn't happened yet. think about the wework stuff, too. we don't think the value trade is going to have some big tailwind just yet. alix: it seems like you are also making a distinction, maybe like tobias did over at citi, that you don't need inflation. you don't need a steepening yield curve. what you just need is no more bad stuff. michael: i completely agree with that. the u.s. economy in its current state is fine for corporate profits as long as margins are maintained, the stock market continues to grind higher. we don't have some cumbrian's of trade deal -- we don't have to have some comprehensive trade

deal. just less bad news would be fine. alix: as we head into earnings season, what is the one thing you are really paying attention to? michael: margins. the smartest people in the world will be looking at margins. if the u.s. economy grows at a couple percent, margins have to be maintained for earnings to be maintained. a lot of people talk about beat rate, ets gross margins. i want everybody to focus on margins. in the face of all of this global worry, that is great for the stock market. alix: michael antonelli of baird will be sticking with me. ,oming up on this program exclusive interview with kim andnais, saxo bank founder ceo. this is bloomberg. ♪ ♪

alix: for those of you on brexit watch, here's some breaking news. the u.k. spring court is going to issue the parliament ruling on tuesday at 10:30 a.m. -- u.k. supreme court is going to issue the parliament ruling on tuesday at 10:30 a.m. they are ruling on whether boris johnson was right to suspend parliament. in the meantime, thousands of executives and business leaders gather to discuss the hyper-connected world. isomberg's guy johnson standing by with an exclusive interview with kim fournais, saxo bank ceo and founder. guy: thank you very much indeed. we are joined by kim fournais, co-owner of saxo bank. the world is a very difficult place to manage at the moment, but one thing that is peculiar is that we are in a very low volatility environment.

many institutions have built their businesses for a lot more volatility, you included. my question first off, here at this banking conference, how money conversations here are about consolidation to deal with the lack of volatility we now have in financial markets? had a haven't actually lot of discussions around consolidation, but i think it is very much about partnerships. it is about how you can service clients and a much more efficient and scalable manner. , if you only have a volatility prone business, it is not so much fun when there is no volatility. so i think low cost and complexity come a better experience and scale are very important components, but also calibration so you can service your clients, but in a new banking environment. guy: are you building the business now for an ongoing situation more have low volatility forever?

kim: this is the new normal. whether that will happen, if we see more volatility, that is a good thing. if we don't, it is a prep -- it is probably a good thing to have prepared for that situation. it is clearly not a world in balance, but with all of the qe, negative interest rates, and risk appetite, it is clearly in my mind dangerous now because we have debt levels we have never seen in this world before. we have pretty un-he make economic growth. -- pretty anemic economic growth. we have trade wars. it is not exactly a world in balance, but the prudent thing is to say this is the new normal and plan for that, which is a lot about reducing cost and complicity. any business should do this at any point in time anyway. guy: that is absolutely relevant, as much as qe has been a huge factor in suppressing volatility. what kind of bank is saxo

going to be as a result of that? are you going to be serving high-end clients and traders who use the platforms a lot, or are you going to be servicing more mom and pop type clients? ofse are not the type clients you traditionally served. the question everybody asks, what is's -- what is saxo going to be? trade in any currency, in any language. i think the client types are very different, so some of them, really hedge fund like, personal and professional. on the other side, there you package, whether it is etf allocators or other

solutions, but i think it is the same machine behind it, but different platforms can cater for the different types of clients. guy: you are struggling to make money at the moment. how long will it be before you start to make money? kim: we are integrating the business which has given us a lot more client assets, and it will reduce cost and complexity quite significantly. what we are seeing now is just a little spike in volatility in argus clearly helped -- in august clearly helped. but like i said, we are preparing for the new normal. ng costbout loweri and complexity and doing more business for your clients. geely boughthina's a majority stake in saxo bank. we are wondering why. what is the objective? it got volvo cars. why have they got saxo bank? what are they told you?

carsel: i think clearly, are a new device. you can already speak to your cars. geely is very prominent in china, and there is financial reform going on. there are the same issues outside china as inside china. there is the technology revolution, changing consumer behavior, market regulations. our market is pretty's unique to be a solution to that problem. guy: ceva expect them to open up china for you? -- so you expect them to open up china for you? i'm curious as to why you would partner with them, genuinely. as i've already indicated, it is tough to make money right now. if you can open up china, that is a game changer. when they came to you, what is the quid pro quo in all of this? can you open china for us? many ways, it is a

technology business. julie, withng with regulators -- with geely, with regulators to find ways into china. when we are more firm on that, we will talk about it. clearly the idea for the chairman is to leverage the technology and the business model that saxo has built and find a path for all of that in china. so we are working on that as we speak, and that is a very interesting proposition, as you say, but it is still early days to be more specific. guy: we will leave it there. thank you for stopping by to see us here at sibos. kim fournais, the founder and ceo of saxo bank. alix:alix: really interesting interview. coming up on this program, i on the louisiana lng terminal ambitions and how this deal gets done in the middle of a trade war. this is bloomberg.

we were thrilled to hear about the indian company and its pledge to purchase up to 5 million tons of lng per year from the united states, which could lead to billions of dollars of lng exports to india in the coming years. ♪

viviana: you're watching "bloomberg daybreak." some wework directors want adam neumann to step down as ceo after the start up delayed its much anticipated ipo. officials tied to the largest shareholder, softbank, are awesome behind the move. representatives declining to comment. in early trading, thomas cook zero bonds plunging. they are losing more than 2/3 of their value after the travel company collapsed under a pile of debt.

talks with creditors failed. thomas cook claim sling -- thomas cook canceling all flights and tours. google bracing for another landmark privacy decision from the eu. courts may clarify a scope of the right to be forgotten law. it passed five years ago. it forces the tech company to delete personal information on request. the court's questioning if the right should apply globally. the court could reach a decision as early as tuesday. that is your bloomberg business flash. alix: thanks so much. we have some breaking news for you. credit suisse, their board is starting a detailed inquiry into the case of a money manager who left credit suisse and went to ubs, and reportedly had been bylowed by some people hired credit suisse to make sure he wasn't taking away any clients or coworkers. credit suisse doesn't say there are significant inaccuracies in -- as to as to the

khan. we will definitely be following any headlines of that. again, credit suisse ordering an inquiry into the khan cast. inking a deal with petronet on -- tellurian is inking a deal with petronet in the largest lng divider in louisiana. with us is to lori and ceo megan gentle -- is tellurian ceo megan gentle. congratulations on the deal. what was the hardest part? megan: thank you. in terms of the hardest part, i don't know. we have had a long relationship with petronet and with the indians. they need the lng, and we are

developing the project, so it is pretty simple on our side. we simply invited them to come and be our partner. alix: what i wanted to point out is there are a lot of lng projects trying to get done, and the fact that you have worked in this industry for a very long ofe as the founder tellurian, it is about the personal relationships, so describe what it is like in that sense as opposed to an upstart that just once to make a terminal. megan: well, we are trying to do some thing a little bit different. we recognize that the lng market is becoming commoditized, so we need to deliver low-cost lng. ofthat context, instead finding a bunch of contracts, we've said to the lng community, why don't you come be our partner? we know we can deliver lng into the gulf coast for between three dollars and four dollars, so it will be delivered between five

and six dollars. you talked about the relationship. i wholeheartedly agree. veryrian has a group of experienced people, and it is about reliability. we know we have a dependable relationship. the construction of the plant is going to happen on time and on budget. so the reliability is very important. alix: what you are going to be building, the total is, li tons annually of lng capacity. you have eight after this. you need four. where is it going to come from? megan: yes, good question. 4 million tons remaining. we have the rest of the buyers in asia and the middle east. alix: there were some conversations of potentially talking to saudi arabia.

saudi arabia did think a deal with the project in texas. are you still talking to them? alix: the middle east --megan: the middle east is an incredible region. there is an increase in gas andnd in the region itself, there's a move from state owned companies to move into lng trading portfolios. alix: so it doesn't have to be saudi arabia? there are other customers in the region? megan: definitely. alix: does a trade war between the u.s. and china hamper demand or the relationship you can have? megan: on the demand side, no. when you think of china and india together, we need to put another 100 million tons of lng into the supply side of the equation just to meet the demand in china and india alone, so from a demand-side, variable on the growth of the lng market

overall, even in the context of the trade, we end the chinese companies are really standing on twosidelines of the presidents deciding on how to conclude an amicable trade agreement. they need gas, and we have gas, so there is a win-win-win there. alix: it appears that tellurian is taking on a lot. you are already committed to 2 million tons per annum on the project. there's also about 4.6 million tons not under contract. are you committing a lot, or do you think you will be able to offload that in longer contracts once you get going? megan: as you know, we are owners of the company, the founders and management. we made a significant investment earlier on. we have now spent collectively, with our investors, almost $600

million on the project, so this is an initial investment. we are trying to build a portfolio of lng. partners for roughly 50% of the project to get the capital commitments started. we are building a global business. alix: it was really great to talk to you. always great to catch up. i really appreciate your time. ceo, gentle, tellurian inking one of the biggest lng deals with a foreign investor. , climate, ted halstead ceo council -- climate counsel ceo. this is bloomberg. ♪

alix: this is bloomberg daybreak. news is a weaker pmi in germany, services as well as factory data. futures flat after closing on a

record friday. the dax is no surprise down by 1%. you get a reverberation of weaker pmi but it could be worse. euro-dollar down just .2% at the close of the session. money coming in but yields only down a few basis points. crude reversing losses, presumably from the weaker pmi, and trading flat. world leaders convene at the u.n. today for the climate action summit is a focus on cutting greenhouse gas emissions. leadership council created a coalition for climate change. c.e.o. ted halstead is out with an op-ed. it says this coalition includes corporate sector leader some a

range of industries, nonprofits and opinion leaders from across the political spectrum. this is a breakthrough plan to cut carbon emissions in half by 2035 while benefiting american businesses, workers, and consumers. joining me is ted halstead the climate council ceo. what is in your plan. ted: we are looking for a time at solution were all sides can win. energy producers pay a fee on all carbon emissions. economists say that is the most cost-effective solutions. you give all the proceeds back to the american people. an average family gets $2000 a year back. regulations become unnecessary and you give is this is predictability. and adjustments to level the playing field and enhance

competitiveness of american companies while encouraging other countries to follow suit. with what did you notice your plan versus president obama's plan? how does it stack up. ted: very well. if you took all obama era climate regulations, even if stayed in place, you will get to 18% reduction by 2025. the paris goal is 28%. 32%plan would get us to greenhouse gas reductions i 2025, far exceeding the paris commitment and by 2035, our plan would reduce carbon emissions by 50%. it is a pro-business plan backed by large oil companies and a solar company and a broad coalition to cut emissions in half. alix: if they have to pay the tax, they don't want to pay it

and they will change how they get their energy. ted: everyone will change their behavior. alix: what is the reception been in the corporate community? alix: -- ted: there is the far-left, the green new deal, and the middle left where they antibusiness revisions and there is a center-right alternative which is what we are offering, a conservative plan with a backing from a broad cross-section of industries. what folks may find interesting is we have a number of oil majors behind the plan supporting the highest carbon price of any leading emitting company which is remarkable. alix: a carbon tax and the conversation around that is not new, but what is new with this? ted: we take a tax which they say is the most cost-effective solution.

we give all the money back directly to the american people. we are aligning the interests of ordinary american families with climate progress for the first time. the treasury department did a study and found that 70% of american families including the most vulnerable come out ahead. we have paired it with pro-business provisions and giving companies far more regulatory predictability in exchange for meaningful carbon prices. it is part of a grand bargain that paves a path for bipartisan climate action. paths will not happen. we are offering a plan. alix: good luck with that plan. climate change moving to the top of investors lists of issues. >> this is the number one thing that climate -- clients want to talk about is how to get

portfolios better positioned. we are invested in climate friendly companies because they are sustainable. we have a fully integrated process and being more oriented towards renewable and sustainable companies. alix: where are the opportunities for investment? joining us as a former treasury official. still with us is michael antonelli. besica, the easy ones will esg etf's and solar companies. what is the most profitable way to invest in climate change? jessica: we recognize that climate change is a crosscutting issue that affects many sectors of the economy from the emitters like energy, transportation, food and agriculture production to sectors that will impacted by the effects of global warming and changing weather patterns,

whether that be health care, real estate. what we try to do is approach this at a company level through differentiated esg research and try to understand how companies are preparing to manage and adapt to these changing climate risks. is sort of one way to disseminate. do, avoidhat do you big oil? how do you look at it? alix: two ways to engage -- michael: two ways to engage with a client is stay away from poorly constructed hyphae products. -- hi-fee products. we want them to take out the stocks we don't like. we like to think about it as a value based investing, where instead of just wearing about where we invest, let's think holistically about who you partner with and where your proceeds go and how you live your life.

we partner with people who care about this and say let's think about this more than investing, how we live and partner together. the partner of those to put us together in the forefront of a move towards holistic ways of thinking about investing. alix: one problem is that a lot of companies want to do good stuff but they say it is not profitable and i point to oil companies front and center. how do you deal with that as an investor? are you willing to take a hit short-term for longer change -- longer-term change? jessica: many clients are with us because they are saving for long-term goals and it aligns well. recognize this is an issue that is a business issue first and foremost. climate change is a business issue and will impact companies, employees, customers, and risks

that they are exposed to paired we want to be in the -- exposed to. we want to be with the companies who will change over and be long-term for the clients. talk about the debt for climate related things? jessica: it has grown from a niche market and is expected to reach $250 billion in issuance, which is fantastic. we have our own green product as well but it is a drop in the bucket that some economic forms say is needed in terms of investment to manage the transition to a low carbon economy. alix: when you look at the holistic approach for the future, it is not a black or white issue. i am focusing on tesla, where they make electric cars, but batteries come from within that uses a lot of water to get to,

or cobalt which is not environmentally or socially friendly. how do you think about those things? michael: those are tough questions. there is no pure play in this notion of investing in sri or esg. there is another angle we can take and that would be, let's andst wisely and smartly let's take our proceeds come whether from an index or bond or directlyand funnel it to companies helping to effect real change. then we take away the notion that it only has to be investing. we can have both investing in all sorts of ways and funnel proceeds into meaningful companies that affect change. that is another way to think about it. alix: to help round out the conversation, the climate

conversation was kicked off with that package. sell companies that make heaters or is it a bigger, broader lens for you? jessica: it is a much bigger, broader lens. climate change is material exposure for all companies and sectors. materialinancially issue which ceos are starting to recognize. we sawtek companies making commitments to mitigate climate change in their own operations -- we saw tech companies making commitments to mitigate climate change in their own operations. long-term and material to customers and shareholders and about what is right for the business. alix: jusco model of calvert. michael antonelli will be -- jessica milano of calvert.

michael and a telly will be sticking with us. anatolydent -- michael will be sticking with us. >> the call with president trump and the ukraine president is under investigation. it is alleged he repeatedly asked ukraine's president to investigate the son of the democratic presidential hopeful. in the race to the white house, elizabeth warren has overtaken joe biden as the front runner. this in the latest iowa polls and caucuses. the senator has the support of 22% of likely participants. joe biden was second with 20%. boris johnson hopes to nail down a briggs that deal on the united nations general assembly. in addition to meeting with toders, johnson is slated discuss a free-trade agreement with the united states. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries.

alix: the hopes and dreams of boars johnson may have gotten -- boris johnson may have gotten tougher. the lead negotiator for braggs it says the current backstop -- says the current backstop negotiation is not there. the supreme court will be ruling on boris johnson's spending tomorrow. membersp, company board to help the plan troubled company. this is bloomberg. ♪

coming upiviana: later today, an interview with the former new york fed president. alix: we look at three companies with watching. emma chandra joining us in

london. at thomaske a look cook. the inventorlook, of the package holiday, collapsing overnight after talks pan investors on a rescue -- plan. flights and holidays canceled overnight. will get what assets they can to pay off creditors at about $2.4 billion. thomas cook not trading today. they have fallen by two thirds, now trading at around or below five cents. it has been interesting is thomas cook's competitors. rising at the highs of the session.

easyjet rising at 4%. they are set to benefit from the loss of a competitor. alix: thank you. you can never complained about holiday. we are looking at british american tobacco. sarah: a rough ride for tobacco stocks. an announcement friday won't make it easier. walmart announced it is going to stop selling e-cigarettes in stores citing growing regulatory complexity and uncertainty. this in the wake of the vaping related illnesses. this includes sales in walmart and sam's club stores. halt will start after walmart works to its current inventory. british american tobacco stocks falling in the aftermath. if you take a broader view at tobacco stocks, you can look at the battle index and it has been tracking lower for quite a while

now. as you can see, it is just about to come on the lowest level since 2011. alix: a third company we are looking at is we word. crystal: they will potentially and criticized by board members about his controversial readership style. -- leadership styles. board members may want to oust him, because of the votes he gets, he can single-handedly fire the entire board. alix: crystal will stick with me. michael antonelli is still with me. what do you make of the fact that this is a softbank play? how much will come from the pressure in the lot of money behind it. crystal: it is telling the

softbank is behind all of the board meeting that will potentially discuss elevating someone else instead umann and the whole soft bank behind it has collapsed -- the whole soft bank behind it has collapsed. -- softbank behind it has collapsed. seeing a change of ceo close to the ipo, uber has a similar play. we have seen that will potentially damper investors' confidence in softbank investment. this.how do you look at is it we works working on its own or a market top or private valuation?

michael: think about the worst have had.e excess we it requires the notion of new era thinking, where it is enough to drive a successful company. regardless of what happens with we works, it is great with the overall markets. they immunize investors against companies that are not ready for prime time. euphoriat strike me as or a market top but the public markets are functioning and saying this company is just not ready. we don't want to see speculative excess and see a company coming out losing money and get valuation. look at the struggles of uber and lyft. i think these are good things. alix: if you want growth, you have to ipo and you have to buy them. michael: the market needs ipos

to work in the right kind of ipo's. when i think about what this means for the broader market, you might have an issue where high-tech valuations might have a cap because people will say the private market valuations have peaked in does that mean public has peaked. we need a healthy ipo market and companies making a difference and that are on a path of profitability and help diversify the stock market. alix: thank you very much. if you are jumping into your car, listen to bloomberg radio. follow us on sirius xm. omens away from mario draghi taking the stage after a is asterisk pmi over in germany. -- a disastrous pmi in germany. this is bloomberg. ♪

alix: mario draghi's testimony in front of european parliament.

joining me is stephanie flanders. this is in light of the terrible pmi data out of germany. how many times will we hear the word fiscal stimulus? thead news for germany and economy coming out of the pmi. good news for mario draghi if he was expecting to face criticism for the extra stimulus that the central bank announced a week or so ago. there is a lot of case for that in numbers which are bad, not just in manufacturing but also services. whether we get to that in this testimony, i don't know. my colleague reminded me that they tend to be a disappointment and tend to be for the lawmakers to say what they want to say about ecb policy at any point in the last eight years rather than a time to hear insights from mario draghi. alix: we know how those feel.

walking forward, we had the climate agreement out of germany friday is that enough to fulfill the fiscal stimulus conversation? stephanie: inching forward in the conversation from schulz, the finance minister who is a different character from his predecessor who would not entertain this conversation readily. the mood is shifting in germany, but they are only talking in terms of targeted programs. it is a tiny percentage of the german economy. if they are really facing a recession and you take numbers at face value, they could be at recession at the end of the quarter. the numbers are not enough. we may hear more from mario draghi. alix: coming from mario draghi is the rhetoric which is this

real? stephanie: we should keep expectations in check, whether we will get real substance. it is mario draghi's last performance so they get more excuses, lawmakers, talk about the past and talk about his time as the european central bank president. i suspect he will say what he said the other day is that this is the right approach and it will do enough and we don't need to do more. alix: thank you very much. that wraps it up for me. coming up, the open with jon ferro. this is bloomberg. ♪

jonathan: the count down to the open starts right now. ♪

jonathan: equity markets in the united states hanging on the trade war twist and turn. the global fallout continues. south korean exports dropped. euro zone manufacturing looking worse. worked board members looking to remove the ceo. good morning, here is your monday morning price action. futures are up, then they were down and now they are unchanged. the dollar stronger, the euro weaker, sub 110. for the sixth straight day, treasury's advance and yields dropped by two basis points on the day. let's begin with the big issue. trade tensions. >> what we are dealing with his actual tariffs. >> uncertainty around trade policy. >> it's good they are not escalating. >>