>> good morning from berlin. this is "bloomberg daybreak: and these are today's top stories. trade optimism sweeps across global markets. this as xi jinping reiterates china's commitment to economic openness. we are in shanghai. does goldman sachs ceo david solomon share the optimism over trade talks? i speak with him exclusively on the european open in just about two hours time, and christine lagarde's debut. herecb's new president uses

first speech to call for strength, resolve, and courage in europe, but steers clear of any serious policy prescriptions. good morning. let's take a quick look at the data this morning, getting set up for tuesday's trade. we have a yen that has weekend toalmost 109 -- weakened almost 109. optimism for a trade deal driving the yen up to almost 109. right now, 108.77, driving up the 10 year yield, looking at 1.80 right now on the 10 year yield as investors feel comfortable enough to let go of the perceived safety of u.s. government debt. you see s&p futures gaining once again after we saw new record

highs for the dow jones industrial average, the s&p 500, and the nasdaq in yesterday's u.s. trade. it is definitely looking like a lot of risk on sentiment in these markets as we get more and more optimism on trade. still, equities may have even higher to go. here with the details is dani burger. we might seeson equities move higher is there's one key group that has not latched onto this rally, and that is hedge funds and other institutional buyers. we can clearly see this using one measure of exposure. this is the relation of hedge fund returns to the s&p 500. you can see what it looks like recently. hedge fund to the s&p 500 is about half of its average since 2002. the reason it looks this way is hedge funds have been positioned more defensively.

they do not buy this improvement in macroeconomic backdrops. while we see stocks rotate into value, they have stayed steadfast in their exposure to momentum. there are a lot of bond proxies. a lot of quality safety stocks. let me show you what it looks like when you have held onto momentum. it does not look pretty. it has see just how much fallen over the past few months, trading on its lowest level -- at its lowest level. hurt funds likely getting by sticking to this strategy right here, so they start to rotate into values, start to join in on the risk-on rally. we will see stocks moving even higher. matt: dani burger with a look at what we could see. let's bring in will themselves -- the chief market strategist at hsbc. william, what do you think we are going to see with stock?

we are starting to get to levels, 23 percent gain on the s&p in new york. a 23% gain -- 24% gain on the dax index here in germany. is it too late for investors to get in on this rally? >> part of that rally was at the start of the year and then we had to plateau in no direction because there was no direction in terms of economic data. the data was on the negative side. no direction from the trade side. i think that on top of the hedge fund fuel, you had a very negative or very risk-off positioning. assetsinto safe haven and lower negative positions on anything risk related. we do think you need to balance your view because we are probably still going to be, even with the phase one deal, in a low growth environment, so, yes

to exposure to anything related to carrie strategies, -- carry strategies or long-term growth areas in the world, but really to jump on the cyclical trade. we are only expecting 1.7% growth in the u.s. that wee you optimistic are going to see a trade deal now? commentseard positive from wilbur ross. of course, a lot of hyperbole from the incident as well. now, we also hear positive andents from president xi sort of behind-the-scenes, a lot of talk about the fact that he might be willing to come to the u.s. even if it is not for a state as it. -- visit. >> they are hoping there will be one and questioning or wondering whether there will be the trade deal we have been talking about or if there are additional cuts. if indeed it is more substantial

and the ism work to stabilize on this, you know, that would be a signal for a more positive market sentiment. but we first need to see that. i think it is dangerous to speculate. banking,m hsbc private you are going to stay with us. our guest cohost for the hour this morning. there is a lot to go through. i want to get to that top story we were just talking about. trade optimism fueling the market rally. white house officials reportedly weighing a decision to remove tariffs on chinese imports. meanwhile, china is reviewing locations in the u.s. to sign the first phase of an agreement according to bloomberg sources. during a rally in kentucky, president trump said they are close to inking that decision. we are so close. china wants to make a deal so badly. i think they would love to see another president.

they would like to see another president. meanwhile, in his first opportunity to address global investors since china and the u.s. resumed talks in september, president xi jinping reaffirmed that his country would open itself further to trade. >> in order to boost growth at home and create more room for , china will give greater importance to imports. we will continue to lower and institutional transaction costs. joins us fromang shanghai. points, thee key key takeaways, from president xi's speech? xiina: you did not hear

specifically mention the united states or donald trump, but he did mention the importance of upholding multilateral institutions, saying countries should not their unilateral interest about those of other nations. he spoke about enhancing legal finding more free trade agreements with other countries around the world. you have 63 companies in participation here. you have emmanuel macron here in participation as well. when it comes to other western countries, you do not have the most high-level delegates attending and some of them are failing to send any at all. that being said, xi's speech is meant to reemphasize the fact that china is meant to reopen the economy further. that is more than just rhetoric and promises. amid this trade war, according to the official report, u.s. companies actually occupy the most exhibition space here, showing that despite the trade tensions with the two economies,

that they are looking to enter the chinese market. significance the of that event, where he was speaking, and how does that fit into the ongoing trade discussions? this is theina: second annual international import expo. it is trying to transition to these consumption led economies and it does support the argument amid the u.s.-china trade war that china is trying to decrease the surplus, the trade surplus here. we have thousands of companies in attendance. around 3000 from alibaba to tesla to astrazeneca. they are here to sign deals. last year, hundreds of deals were inked, worth billions of dollars, but the issue is that these companies are going to want to see concrete plans. more than just empty promises.

about half of the expo dealsants said there did not go through because they did not see follow-through from the china side. are going companies to want to see more than empty promises. matt: thanks very much. selina wang in shanghai, where president xi jinping held that speech. still with us is the chief market strategist at hsbc. do you see any opportunity here? president xi, time and time again over the past couple of years, has tried to make this argument, that china is opening up. they have the roads enbridge initiative, and people are arguing, maybe europe should try and strengthen its asia trade ties while the u.s. is increasingly isolationist. i mean, where are the opportunities? therethere are -- willem: are clearly opportunities for developed market companies that

trade within china. the opportunities as you were alluding to at this point in time are more in the domestic theomy, i.e., with consumer. as the consumer grows wealthier, onher they spend the income -- for they spend it on themselves, especially on health care and also on travel and entertainment. consumption growth is a structural and -- it has a low correlation with what is happening in the trade cycle and in the trade news, so therefore, a relatively defensive trade in our view. matt: do you see other beneficiaries of the trade war? ashave noticed that companies avoid manufacturing in china, they end up in places like vietnam. marketse other emerging beneficiaries of this trade war? willem: there is some of it but

not as much as some people might have expected. obviously, if you are a producer in china and your customers to next to you and your suppliers next to you as well, it is difficult to go and move. there are these polls of real expertise and real clusters of industry, and therefore, quite a lot stays in china. where we do think there is opportunity as well is to look at what the government's reaction has been to the trade tensions, and obviously, china is stimulating its local economy through infrastructure, so therefore, anything that has to do with construction, engineering, even the telecom sector with 5g and so on are areas benefiting from the reaction of the chinese government to the trade tariffs. matt: when you look at regions, there are some -- when i look at your notes, i do see some em opportunities. in equities, for example, indonesia. you'd like india, you like

brazil, and even in credit, you see some opportunities there. why is that? willem: india, indonesia, brazil, very much the same topic in terms of domestic consumption, domestic economies. relatively large economies that are somewhat less exposed to global trade than them except thanland, taiwan -- thailand, taiwan. that is a positive. in the case of brazil, obviously, the reforms with the new president are not so new anymore. positive developments. in the debt market, we are looking at support from interest-rate cuts. following the lead of what the fed has done, we think the fed is done with its interest-rate cuts. in emerging markets, we still expect some support from further interest-rate cuts in the likes , whicha and indonesia should support bond markets.

matt: we are going to talk a little bit more about that throughout the program. you are going to stay with us. willem sels, from hsbc private banking. bloomberg first word news. we go to annabelle droulers in hong kong. u.k., the election campaign is heating up with prime minister boris johnson and opposition leader jeremy corbyn trading barbs. the house of commons has elected its new speaker. lindsay coil -- he was a member of the labour party. without partyt affiliation. to hong kong, and china's president is backing the leadership of carrie lam. that is despite five months of ongoing pro-democracy protests. president xi says ending violence and restoring order remain the most important tasks in the city. lam remains in the job after denying reports that beijing planned to remove her.

india has decided against joining a trade agreement covering much of asia. it paves the way for other countries to sign the deal next year. india says it has significant issues with the deal called the regional economic partnership. president trump has formally begun the process of withdrawing from the paris climate accord. the move was announced in 2017 and will take another year to complete. this sets the stage for the u.s. departure for the deal. the day after the 2020 presidential election. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt. matt: thanks very much. annabelle droulers in hong kong with your first word news. coming up, goldman sachs ceo david solomon joins me here in berlin for an exclusive interview. do not miss that conversation at 8:30 on the continent, 7:30 a.m.

in london. when you are traveling to work, you can hear it on bloomberg radio as well. just tune in on your mobile device anywhere in the world or if you are in the city of london. on the digital dial. this is bloomberg. ♪

matt: this is "bloomberg daybreak: europe." i am matt miller in berlin. let's check in on the markets right now in asia. for that, we go to rishaad salamat in hong kong. rish. got a saw ajust public holiday. order that is down perhaps to

there being improved trade disputes with south korea. i am getting my tongue twisted. nikkei up 1.3%. we have an improved dialogue taking place. they are trying to ease tensions. that is helping the market. that whole optimism about the trade deal helping to list equities in this part of the world. the philippine market, the second best performer. jci as well. not currently on that is what is going on with the csi 300, which is about .3% out, engendered by a move to reduce funding for one year for banks. five basis points down. liquidity helping stocks in china and hong kong. people essentially looking beyond the darkening economic storm clouds, which certainly are pervasive in the city. we did get an interest rate

decision out of australia. rate cuts helping to lift the aussie dollar. that rally resuming, nudging towards 17. essentially what we have here is what governor philip lowe said. he said they are basically done for the time being with regards to rates and that limits the gains we saw on the equity markets, up .1%. it did help the aussie dollar to move to the upside. the 10 year yield was perhaps the worst behind them as far as the economy goes. further easing of policy. we are 40 minutes away from a rate decision out of malaysia. this is where we are. we had the ringgit at levels we have not seen for something like three months earlier. came off that. looking at rates at 3%. it is a bit more if with about one third of the economists suggesting they may well go for a cut. u.s. dollar index just down a

fraction at the moment. this is the position we find ourselves in. in rally resumes. is it also enticing other people to come in? has this rally got legs? it could engender a fear of missing out. that itself could produce a positive self-fulfilling prophecy, as it were. back to you guys. matt: you are sounding like our old friend, john dawson, for a moment. it would be great to see him. it is great to see you as well. rishaad salamat in hong kong with a look at the asian markets. let's get the bloomberg business flash. we go back to annabelle droulers in hong kong. annabelle: thanks. disappointing investors with its quarterly results. it posted lackluster gains. two of the most closely watched metrics on wall street, but it was not all bad news. the ridehailing company beat estimates --

it improved its annual loss forecast, pledging to turn a profit by 2021. barclays is being investigated by u.s. regulators as to whether it violated security flaws. it raised concerns about marketing practices for certain bonds. we have been told the probe is preliminary and may not lead to any allegations of wrongdoing. decliningnd the sec to comment. mcdonald's human resources box has left the company after 15 years. the departure coming one day after the start ceo was fired. mcdonald's is viewed with a lot of scrutiny because it is viewed as a bellwether. that is your business flash. matt: annabelle droulers with year business flash. christine lagarde has one under her belt as

the president of the ecb. her first speech in the office, she called for strength, resolve, and courage, but steered clear of monetary policy. meanwhile, over at the fed, the san francisco president, mary daly, did talk shop, saying a material change in outlook was needed to warrant another cut. with us.ls is still we have got some of the big wall street banks forecasting a surge in rates. others are forecasting that we could fall into negative territory by 2021. where do you see rates headed? willem: nowhere. evenally stable to 2021 because it depends what part of the economy those economists are looking at. if you look at manufacturing, it is very weak and it is good to remain weak for a while. you need quite a substantial

trade deal to improve that sentiment. on the other hand, the consumer is quite strong. as we have seen in the labor markets figures last week. so basically, what it means is that central banks in terms of interest rates is too glum. the solution is not there. in the case of the fed, i think that there is no need for the cuts. matt: is there any need for fiscal -- there's so much talk about fiscal stimulus being necessary in europe. it has me starting to think about the times when we used to talk about infrastructure spending in the u.s. we did get a tax cut package. we did not get infrastructure spending there. do you think that that is something you see on the horizon? willem: it is what people are hopeful for. it is a political decision, which is one of those difficult ones for investors. when you're talking about

earnings, rates, a whole army of people can analyze that for you, and we feel very comfortable with that. when it is about politics, it's much more difficult. they are hoping for green investment in europe. so instead of upgrading the whole european equity market, why not just invest in that kind of area of the economy? the green investment in the stock market. that is something that we know needs to have been generally around the world anyway. we would rather play that from a somatic perspective rather than say, yes, this will happen. not that attractively priced relative to the u.s.. --t discount is basically matt: that is a fair point. the esg argument is one that we are hearing more and more in the mainstream. the question is how far could it

go? is there an end in sight? willem sels from hsbc private banking stays with us. coming up, we are going to talk about the uber user growth. it disappointed. ♪

matt: this is "bloomberg daybreak: europe." i am matt miller in berlin. let's talk tech. uber's third-quarter revenue came in better than expected but investors were disappointed with the user growth figures. annmarie hordern joins us with all of the details. >> good morning, matt. the shares dropped in after hours trading. investors were left disappointed with the lackluster t growth inwp -- lackluster growth in two key metrics. rideswho ordered food or

one or more times during the quarter. uber beat estimates for revenue in losses. they improved in losses. they improved the annual loss forecast. uber's small from arrival, lyft this quarter. they emphasize greater efficiency on the call. they say if they cannot get to the number one or two spots in the market, they will exit, but that was not enough to lift the stock which may come under more pressure. was the first question on the earnings call. and something weighing heavily on everyone's mind, it will bring another -- 11%ou can see, over two has on the market, which means the market cap of $52 billion, only $6 billion trades, matt. matt: thanks very much. annmarie hordern taking a look at the uber -- i want to say -- disappointment, in a sense.

it does seem to be, according to our bloomberg opinion writers, headed in the right direction in terms of profit, something i will also talk to david solomon about, the chief executive of goldman sachs when he comes into --s office in one hours time we go to animal to -- annabelle droulers in hong kong. beijing is reviewing locations in the u.s. to meet president trump to sign the accord. this coming after the ft reports washington considering removing some tariffs on chinese imports. to hong kong, and china's president's backing the leadership of carrie lam. that is despite five months of pro-democracy protests. president xi says ending violence and restoring order remain the most important tasks. jobie lam remains in the

after denying reports that beijing planned to remove her. in australia, the central bank keeping policy unchanged. betting a rebound in property prices will lead to an increase in confidence. the cash trade is being held at 0.75% after three cuts since june. the reserve bank sees economic growth picking up, rising to 3% by 2021. india has decided against joining its joint trading agreement, covering much of asia. it paves the way for the 13 other countries to sign a deal for next year. india says it has significant issues with the, called the regional comprehensive economic partnership. to the ecb, and christine lagarde used her first speech to call for strength, resolve, and courage. lagarde joins the institution at a key moment, with the euro zone economy under strength yet again.

the first policy meeting is set for december 12. in the u.s., president trump has formally begun the process of withdrawing from the paris climate accord. the move was announced in 2017 and will take another year to complete. it sets the stage for the u.s. department for the deal the day after the presidential election. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt. much.thank you very annabelle droulers in hong kong giving us our business flash. i want to get quickly to pandora. i am looking at these headlines coming across from the jewelry maker, not the radio service operator. pandora sees full year organic revenue dropping 7% to 9%.

it previously saw full year organic revenue dropping 3% to 7%. it sees a bigger drop in full year organic revenue than it has seeing previously. -- its full-year operating profit margin at 26% to 27%. it previously saw 26% to 28%, so narrowing the range towards the lower end. this is going to be something that investors will not love to see after the third-quarter loss . 119 million krona and third-quarter operating profit of 891 million krona that misses the estimate for over one billion. missing estimates in the reporting quarter and lowering its outlook, cutting its sales outlook, certainly, for the full year. watch those shares move at the open. coming up on bloomberg, we are also going to speak to the ceo

of pandora, alexander lasix, who joins us for his first interview of the day. do not miss that conversation shortly. prime minister boris johnson and his main rival, labor leader jeremy corbyn, traded brexit barbs as the u.k. gears up for an early election. johnson wrote an open letter to corbyn, asking him to clarify his brexit energy, and corbyn accused johnson of hijacking brexit to pursue his own political agenda. willem sels from hsbc private banking is still with us. we have already discussed the fact that it is almost a full game to try to predict political outcomes, but certainly, you can see the effect the uncertainty has had on businesses, and i wonder if you think that uncertainty has now diminished to some extent, or are we still in a situation where the economy suffers greatly from the lack of

visibility? willem: there are some areas of a little bit more resilience, even in the u.k. economy as well, but it is clear that all of the different scenarios still remain. for sterling, we have had three forecasts. case there in was a hard brexit. 145 in case there was a negotiated brexit. 165 if the brexit does not happen after all. you know, as we go to an election now, i think the forecasts are still there. it is completely difficult. very difficult. you can understand it from a ceo's perspective and even from a consumer perspective. that is a headwind, not knowing where it is going. when you look at investments in the u.k., a lot of people have been making the point for three years now

that ftse companies are incredibly multinational, and so affected by brexit, yet the ftse has not done nearly as well. it is only up of third as much year-to-date as the other continental equity indexes. what does that mean to you? is that all about the pound? rishaad: it is all about -- willem: it is all about the pound. know,ors typically, you withoute markets hedging. you have to take a strong view around the markets in the brexit scenario. the you are pointing to is u.k. market has become relatively cheap, so if you did have a view, it would be a market where you could take, you know, a bullish bet. you need to go through that volatility, that uncertainty,

and that is something few people want to do at this stage. matt: what do you think about the currencies -- the currency levels we are seeing right now? as possiblyable moving in a big range or do you think the range is pretty tight regardless of what happens? i guess, almost more importantly, what about the dollar? we have seen it come off a little bit. is it going to weaken considerably? willem: sterling has been stuck to some extent because people find it difficult to put probability on those until they have more clarity. with regard to the u.s. dollar, it has come off quite a bit. we have much more sympathy for a stronger dollar at this point in time for a number of reasons. the fed is probably done in our lst other central banks around the world may be cutting so that jacks down other

currencies relative to the u.s. dollar. in terms of flows, when we look at bond portfolios for clients, it is much easier to find attractive yields in the u.s. dollar market than in the euro market than in the yen market or in swiss. that creates the potential for flows into the u.s. i think from a structural perspective as well, u.s. growth is superior to what we are having in europe. that technology sector will still continue to be a driver over the next few years, you know, off that superior growth, and lead to inflows as well. a lot of people were waiting with baited breath at what christine lagarde had to say yesterday. turns out to be, let's be fair, she did not say very much. do you expect her to do a lot when she comes in as ecb president or continue to toe the draghi line? answered this

question during his last session where he basically said she will have some time for policy. it is a function of the theme, obviously. not just one person. most crucially, of course, it is a function of what the european economy is going to do. the european economy continues to be relatively weak. .nflation well below the target quarterly inflation fluctuating we think between .5% and 1% next year, so it will be low for longer even under lagarde as well. no change in terms of general policy. matt: pleasure having you with us. from hsbc private bank. our guest cohost for the hour. kkr has raised its biggest ever european fund, according to a report in the ft. at 5.8 billion euros, the capital illustrates the industry appetite for dealmaking in

europe. dani burger joins us now with all the latest. dani: 5.8 billion euros was not even there target. their initial target was 5 billion euros so the extra .8 shows how much demand there is for private markets. this is a western europe aimed fund. some of the companies they have been looking at as well as german payments company -- what this shows is the demand for private markets is so rich when we have a time with u.s. stocks doing that they are trading at all-time highs. the concern is that public markets at this moment -- valuations are so high that they do not have much further to run, so where you get the returns, you have to move into private markets, especially with government bonds yielding close to nothing, yielding negative. that is why private markets, especially in europe, look so attractive. byy have also beaten stocks

a wider margin than the u.s. has. then, you had a u.s. that's really, really frothy in terms of private equity money. that means we will continue to see these u.s. funds like kkr move into europe where they can hope to get bigger return. we continue to see new types of investors putting their money with these funds, giving us these behemoth funds like we are seeing from kkr. you add in record drive powder and you get the companies that continue to stay private for longer. anne-marie was talking about uber disappointment. it is ipo's like that keeping private money continue to be private. what these funds really want our exits. europe equity funds in is looking again at plans to relist the visa payment provider . this was delayed for one year. the reason they could do it is exactly what we are seeing in kkr. there is more money in private markets, meaning that these companies are going to continue

to stay private for longer with funds we are seeing from kkr. matt. explainer. dani burger with us, talking about the kkr news. coming up, pandora's lay sick -- pandora's ceo joins us for his first interview of the day. do not miss that after the results hit the wires. goldman sachs chairman and ceo david solomon joins us for an exclusive interview in berlin in just about 45 minutes time. do not miss that conversation. this is bloomberg. ♪

matt: this is "bloomberg daybreak: europe." i am matt miller in berlin. here is a look at what you should be watching today. lyons asspeaks in

christine lagarde made her first address, the ecb president, yesterday evening in berlin. she called for strength, resolve, and courage, and steered clear of monetary policy. we will be watching for an update on germany's future plans for electric mobility as the government meets with representatives from the car toustry to discuss how speed up the transition to battery-powered cars. angela merkel was hanging out with volkswagen executives yesterday at the opening of their id3 plant. worldublishes its annual oil outlook from vienna today. we will be watching out for where opec sees oil demands from now until 20 body and finally, u.s. trade balance data is out later. it could underscore the ill on tradef tariffs uncertainty. the report is projected to show if both imports and exports of goods both slumped in september

two the weakest levels in more than a year. danish jewelry manufacturer pandora has cut its full-year organic sales and operating profit targets. the group reported third-quarter 4.42 billion danish krone versus an estimate of 4.65 billion danish krone. joining us now from copenhagen for his first interview of the day is alexander lay sick, the -- is the ceo of pandora. thank you for joining us. to missing your targets in the third quarter and then cutting your full-year forecast? alexander: good morning, matt. thanks for having me. let me just correct you a little bit. in terms of our full-year guidance, we are still within the guidance that we launched back in february.

the one slight change we have done is to which a -- is to adjust our target downwards and the reason for that is a deliberate choice to reduce the at ourry position wholesale partners, which means we are trying to line up with what we sell in verses what sells out. it is a one-time adjustment, which is really just necessary to do. the other thing is if you look at our like for like guidance, we are still within the guidance we had. he bit guidance is within the guidance again. it is a matter of adjusting stocks at our wholesale partners. to bei mean, you know, fair, if my boss had told me a couple months ago i am going to reduce your salary 3% to 7% and then told me today i am going to reduce it 7% to 9%, i would consider that more than a slight adjustment. what is the problem? what are the headwinds that lead to this reduction in your

organic growth forecast? said, whenwell, as i we came into this year, we knew that the inventory position and the quality of the inventory that sat around the supply chain was not where it needed to be. of course, when you have like for like sales that have been in the negative territory, that puts even more pressure on the kind of position that you create from an inventory standpoint. on top of that, we have also decided as part of the relaunch of pandora to reduce the overreliance on promotions. we have a couple of factors which are all there to drive a healthier outcome for the brand. we are very much focused on the like for like performance, which essentially is the kind of verdict from the consumers, whether they are buying our products or not. if you look at our like for like performance, it is where we expected it to be for q3. it is a push in a volume which has been reduced. so that is less of an issue for us. matt: whenever i see someone

reducing a margin target or sticking within the range but pulling it towards the lower end, i wonder if that means again in market share. is that the issue? are you giving up pricing power to take a larger slice of the pie? alexander: if you look at the ebitda ins, we are getting closer to the end of the year. we have eight trading weeks left. we think it is prudent to guide within that range into a narrower band in order to provide the market with as accurate data as we possibly can do at this point in time. -- matt: you have done great if you look at the -- the stock.

is this part of your plan? alexander: when i joined, the net captures the relaunch, and a number of different activities within that in order to kind of put the business on a healthier footing, that was kicked off late of q3, and we see some strong signals that this program is starting to yield. as i mentioned, taking promotions down, we are putting out some new store concept, investing more in the media, putting out a new marketing program. so a number of important elements which are all there to entice consumers. what we have seen in the late trading of q3 and actually into october, we have more consumers coming back to pandora both on and off line. we are putting the business on a healthier footing.

having said that, we are kind of entering q4, which is the daytrading period for this type of business. and we will see kind of how all of this yields, but we are very confident that what we have started is the right thing, so hopefully, that sets us up for a very different development into next year as well. -- i so i wonder about mean, you are in an ideal position, alexander, to judge the health of the consumer. is scared andr worried about its income or his or her income, there's no amount of enticing you can do. what do you see as far as the health of the european consumer right now? mean, the markets are a little bit slower across the globe. i mean, we have brexit, which obviously is influencing the british consumers not just for us but for many other companies.

a little bitbeen unstable. i mean, hong kong, we have other things going on. so you know, the number of things we are, of course, consumers are scared. they hold onto their purse. what we can provide good value. we can provide good products. we are upping our game when it comes to marketing and kind of making sure that people know who we are and what we stand for. and then the consumer will play after that. matt: thanks very much for joining us today. of pandora,cik, ceo after the company put out results earlier this morning. s from hsbc sel banking is still with us. i want to ask you what we just talked about with alexander, which is the health of the consumer. how do you see the health of the european consumer? it has to be a little bit more tenuous than that of the u.s. consumer. willem: it is a little bit more tenuous. the danger for the consumer is

that, you know, if we have continued manufacturing weakness, obviously, that will lead to some pressure on the services sector, which we started to see, and through that, put some pressure on employment as well. in the u.s., we had a good payroll figure. even there, hiring intentions have come down. need aknow, we really stabilization of the trade situation to avert a slowing of the consumer. see, just quickly, the manufacturing concerns, does this spread to services? is that the next shoe to drop? willem: we are seeing this already in the surveys. the question is whether we are going to see it in the real hard data as well, and that is one of the reasons why we think, although we do not look for a recession at all, even in europe, but also in the u.s., we do think that from an earnings perspective, but consensus earnings expectations for 2020 are a bit too high.

matt: thanks very much. willem sels from hsbc private banking. coming up, david solomon joins us for an exclusive interview here in berlin. do not miss that conversation in 30 minutes. ♪ here, it all starts with a simple...

hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today.

matt: good morning from berlin. i am matt miller. this is "bloomberg daybreak: europe," and these are today's top stories. u.s. stocks hit all-time highs on every major index as treasuries tumble and trade optimism sweeps across global markets. xi jinping reiterates china's commitment to economic openness. we are live in shanghai. does goldman sachs ceo david solomon share the optimism over trade? i will speak exclusively with him right here in our berlin bureau on the european open in just about 30 minutes time. and christine lagarde's debut. the ecb's new president uses her

first speech to call for strength, resolve, and courage in europe, but not fiscal stimulus, and steers clear of monetary policy. good morning. we are getting breaking earnings foods. we speak on ab the company is saying full-year revenue was 15.8 billion pounds. int is being in line -- bang line with the analyst estimate in our survey. a4 2 billion pounds, just hair above the estimate of 1.41 billion pounds. primark sales, in terms of , up 1%. fx

ab foods giving us a little bit of a look at an in-line quarter. in terms of the full-year adjusted eps number, it was 137.5 pence. we were looking for 136.1 pence. a little bit better than the analyst estimates. it does seem margin decline for primark in the first half of the coming year, so watch out for that. we are getting imperial brands right now. imperial brands saying that it's going to take a more cautious approach to its outlook for 2020. it sees full-year low single digit and eps growth. it says performance is expected to be waited for the -- weighted for the second half. we will continue to give you

headlines on these developing earnings stories as they come across the wire. let's take a look at futures. in terms of the equity indexes, and getting ready for trade to kick off across europe and in the u.k. morning, we are seeing substantial gains and ftse futures. right now, up .5%. tax and cap futures gaining. in terms of u.s. futures, we see gains there as well. record highs we hit yesterday on the s&p, the nasdaq, and the dow jones industrial average. taking a look at bond futures this morning, you can expect that investors will not need the safety, the perceived safety of government debt. you can see bond futures are down. that means the yields will continue to float higher as we have seen over the past couple of trading sessions as well. over the past month, really. our top story is the trade optimism that is driving the gains in equity indexes, equity

indexed futures, and in bond yields. positive signals from washington and beijing emerging during a rally in the u.s. state of kentucky. president trump said that they are close to signing phase one of the deal. pres. trump: we are so close. china wants to make a deal so badly. i think they would love to see another president. to. would like matt: meanwhile, speaking in , president xi jinping reaffirmed the country would open itself up further to trade. >> in order to boost growth at home and create more room for global growth. china will give greater importance to import.

we will continue to lower and institutional transaction costs. that was president xi jinping speaking at the china international import expo in shanghai. joining us now is frederick carry a -- carrier. what is your take on the increased optimism we have gotten on trade that is driving a risk rally globally? >> good morning. our roadmap for trade discussions is that we would oscillate between times of heightened tensions and times of detente. we certainly are going through a few weeks where we are seeing more positive music. we do think that a very comprehensive deal is very difficult to reach at this stage and while we may have a phase one deal which we will no doubt

be positive for markets, we think tensions might come back at a later stage. matt: so do you think this rally has any legs? we are seeing all-time highs again on all three major u.s. equity indexes, and we are seeing massive gains. i mean, the dax index in frankfurt is up almost 25% year-to-date. bederique: so germany would one of the main beneficiaries of lower trade tensions. it's economy is very open. the manufacturing sector is very important. it is more than 20% of gdp compared to 10% of gdp in the u.s., so it would be one of the main beneficiaries of china, which grows a little bit more. -- youoes that mean think that we could see this rally continue? or is it time to take some profits off the table? frederique: we want to be fully invested in the market at the

moment. given the positive narrative that we have seen, particularly in the u.s., with earnings forecasts stabilizing, we think there is a potential for further support in equities. matt: talk to me for a second about what you see in terms of the u.s. earnings season and what we are watching unfold here in europe. you know that analysts drove forecasts down into these results. so they are still going to -- you are still going to see a fair amount of beats. what do you see in terms of outlooks companies are putting out? frederique: what is more important than beating expectations is earnings forecasts for this year have stabilized. we have gone through several weeks where forecasts were systematically downgraded and earnings forecasts for the full-year have stabilized at just under 1% growth. very meager growth indeed. last year, we have very strong

growth on the back of the tax reform in the u.s., so subdued growth is actually good news. with respect to what is coming up next year, very few companies are giving guidance at the moment. most of them say that they will give guidance in q4. in terms of the broad outlook, they talk about demand still being resilient, still being constructive. and there narrative suggests that earnings growth in mid single digits, 5% to 6%, is likely, so earnings growth -- consensus earnings growth is about 9%. we expect it to be downgraded. but a single digit earnings growth would be enough to drive markets further. matt: what do you think about earnings here in europe? companiesing european even near the same strength and

resilience of u.s. companies? frederique: it is more difficult to eke out growth in europe. as you know, the overall economy is weaker than in the u.s., so at thes growth is -1% moment. people -- expectations are more subdued there. nevertheless, they are still beating expectations. , we areederique carrier going to hold on to you for a little bit more. we have some want to go over with frederique. i want to get the first word news p for that, we go to hong kong, and our own annabelle droulers. annabelle: in the u.k., the election campaign is heating up with boris johnson and jeremy corbyn trading barbs. meanwhile, the house of commons has elected its new speaker. refereebe parliaments for the next phase of brexit.

sitonvention, he will without party affiliation. in australia, the central bank keeping policy unchanged. it is betting a rebound in property prices will lead to household confidence. it is being held at 0.5% after three cuts since june. the reserve bank sees economic growth picking up, rising to 3% by 2021. to hong kong, and china's president's backing the leadership of carrie lam. that is despite five months of pro-democracy protests. president xi says ending violence and restoring order remain the most important priorities in the city. lam remains in the job after denying reports that beijing planned to remove her. way for the 15 other countries to sign the china back to deal next year. india says it has significant issues with the deal, called the regional comprehensive economic

.artnership global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt. matt: thanks very much. annabelle droulers in hong kong. coming up, goldman sachs ceo david solomon joins me here in berlin for an exclusive interview. that is a conversation you do not want to miss. just after 7:30 a.m. london time, 8:30 you're on the continent you tomorrow, we are going to speak to the president of south africa, cyril ramaphosa. that conversation at 9:30 a.m. london time. this is bloomberg. ♪

8:15 here in berlin, seven: 15 in london, 45 minutes away from the market open. this is "bloomberg daybreak: europe." i am matt miller. it's get to the bloomberg business flash. for that, we go to hong kong and annabelle droulers. uber is disappointing investors with its quarterly results. it posted lackluster gains. they are two of the most closely watched metrics on wall street but it was not all bad news. the ridehailing company beat estimates for revenue. it also improved its annual loss forecast, pledging to turn a profit by 2021. it isers is taking -- cutting prices across the board for the first time in years. the world's biggest diamond producer is lowering prices by about 5%. de customers -- many

customers are operating on wafer thin profit margins. is studying setting up the unit late next year. the move would see it build the business itself rather than by a local firm. that is your bloomberg business flash. matt. matt: thanks very much. annabelle droulers in hong kong. china is reviewing locations in where president xi jinping would be willing to meet with president donald trump to sign the first phase of their trade deal. this according to bloomberg sources. it is not just china's trade deal with the u.s. that is in focus. speaking in shanghai, president xi jinping reaffirmed china would open up to further trade for the globe. let's go now to shanghai where tom mackenzie is standing by with the president of the

italian trade agency. tom. take it away. thank you very much indeed. yes, i am pleased because i am joined by the president of the italian trade agency. carlo, let's start with the trade war. we have seen the two sides, the u.s. and china, getting closer to the phase one part of the deal. it may even be signed in the u.s. oft would that mean in terms the material impact for european companies if we do get that mide deal pocketed away, november, and of november? does it have an impact on your business? carlo: i think so. it would be great news. today, the global gdp growth is suffering. about brexit, about the tariffs, about the dispute between the usa and china.

let's relax with the business to flow and the gdp to grow faster. enough do yoube think to allow italian companies to start spending again on capex? would've a phase i deal be enough for what you need to see a comprehensive deal? carlo: it is continuing to grow and this is an important sign for our economy. in the first 10 months of the year, it is eight months of the year. it grew by 2.6%. at the trend by sector, there are areas, automotive, for instance, where growth has been significantly impaired by the overall global market and global industry. apex will bee that c significantly driven. the walk us through some of deals you expect to be signing here in china and their impact. carlo: the italian trade

industry is very active. in order to help italian companies, not only to be more present in china, but also to liberate their model. thet e-commerce, about online commerce, whereby you enter the shop with a smart phone and you exit without bags, and it will deliver at home. in thisigning a deal direction. we will sign an agreement with yi gang to enter 200 brands in italy including market -- tom: the e-commerce platform? carlo: correct. the e-commerce platform and the other one, alibaba. tom: what is the value of those deals? carlo: we will bring 500 new

brands between the two agreements into china. tom: rather controversially, some would argue, italy signed up for the belt and road initiative. has that pushed to strengthen sides with china started to pay off? has it opened up other doors for italian firms? triggeringlo: it is an approach by italian companies towards china. last march. end nurturingthe those opportunities. we take fewer amounts in order to see that on italian exports. >> your former role as chairman of the french italian chipmaker, does that give you a sense of what the european commission should be doing in terms of some of these security concerns that have been raised in

washington? is there more europe should be doing to protect some of its core technology from china and potentially restrict some of the core technology flowing to the chinese companies involved in things like surveillance? tom: -- carlo: we are becoming more and more global. technology flowing across the world is increasing. very important principles. number one is the respective intellectual properties. the second one is the respect of any privacy or communication that defends the interest of any single country. tom:tom: in terms of the concerns for huawei, is italy paying more attention to what washington is saying about some of those security risks? how do you balance that relationship? you want a strong economic partnership with china but you also have to allay concerns about security. carlo: there has been

high-sensitivity in alien respect to the security of communication. believe me, when you look at the network of infrastructure in italy. this is not tom: let me ask you about the european union in the u.s. when it comes to trade. we heard from wilbur ross, the, secretary, saying may be the u.s. does not need to impose tariffs on european autos. do you think they are getting closer to some kind of agreement on this issue? carlo: it is a quite unfortunate circumstance. also, due to some lack of synchronization in timing, at the end, they ruled in favor of case, aon the airbus case that started 14 years ago, and there is in parallel a similar case by the u.s. government.

cases finally ruled -- this is the hope. clearly bringing some negative effects to the european industry, likely the italian industry has been affected a little bit less than expected. as you know, italy is not one of the producers of airbus. italy would pay only 2%. the italian trade agency we put .ogether support those companies and products affected by the american tariffs. thank you very much indeed. carlo ferro will be putting pen to paper on a number of deals and a little under 30 minutes. matt. mackenzie in shanghai

with president of the italian trade agency. to centralturn banks. christine lagarde has one speech under her belt as the president of the ecb. in her first speech in the office, she called for strength, resolve, and courage, but steered clear of fiscal stimulus and monetary policy. meanwhile, over at the fed, mary shop, saying a material changing outlook was needed to warrant another cut. carrier is with us. do you expect cuts from jay powell and company over the rest of this year and in 2020? >> it might be one of the cuts

coming out from the fed. we do think this is a midcycle adjustment in interest rates. needed in would be order to see rates rise? i mean, what do you see as the possibility of rates going the other direction if at all? frederique: we see that is slightly less likely. we would have to see clearly the economy growing much more strongly than it is and inflationary pressures, we see the driver of the u.s. economy at the moment being the u.s. consumer, and that is in good health. businesswise, business investment is still somewhat weak and this would really need to improve in order for the fed to go the other way and start increasing interest rates. matt: the idea is you see another cut and that could help maybe boost business spending to

some extent. the ecb is in a much more difficult place because the ecb, in order to cut, would have to go below -50 basis points. they have restarted an open-ended bond buying program at 20 billion euros a month. is that going to work? frederique: the ecb is going to see -- it is going to wait to see whether this big package septembernnounced in first has to be carried out. some of these measures have not been implemented yet. see if we expect some implants. clearly, what we would need to see is a really be a game changer would be more fiscal stimulus, which is at the moment out of the question. but these measures, this 3% deficit, 2% of gdp deficit debt limit of 60% of gdp, these are old targets which probably need to be modernized somewhat and we expect this to be -- to have

more talk on that going forward. matt: thanks very much. frederique carrier, head of investment strategy at rbc wealth management. coming up, the ceo of goldman sachs, david solomon, joins us for an exclusive. ♪

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because 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.

>> good morning and welcome to bloomberg markets -- the european open. live from ourrds bloomberg headquarters in london. matt miller will join us in with an interview that you will not want to mess. -- miss. u.s. stocks hit all-time highs as hopes for a trade deal buoyed the markets. is addressing the risk sentiment saying that chi