>> it could have been worse. china shows a economy recycling. china stands firm on the need for tariff rollbacks and the u.s. demands china shows how it will buy every year. brexit, d.c., hong kong, latin america. c.e.o. chuck robbens warns of a lack of clarity and business confidence as they face their first revenue decline in two years. welcome to "bloomberg daybreak." i'm alix steele. waiting for jcpenney to look at a read on the market. the equity market down .2%. as i said, maybe it could have data dump had he been worse. you are seeing money flow into the bond market, two days yield now on the 10-year.

time for global exchange and bring you today's market moving news from around the world from hong kong to frankfurt to london to new york and washington. our bloomberg voices are on the ground with this morning's top stories. we're going to start with the latest in asia. trade uncertainty appeared to take its toll on china. the country's economy losing more steam in october, factory input and fixed asset sales missing estimates and joining me from hong kong is bloomberg's chief asian economics correspondent. give me the rundown of the data we've got. >> it was a mix across the board with a slump in investment and industrial output miss expectations and on the retail spending part of things we saw the weakness go from auto and turnt and cuggetting the consumer is starting to book now none the pressure of trade war and slowing economy. there were two big takeaways from economists and onen one hand the numbers suggest we're

probably looking at 6% growth in this current quarter and probably shows the idea china's growth target next year will be below 6% and was one key takeaway and the second part economists say it underscores why china needs to secure a trade agreement with the u.s. and we had a comment from the commerce ministry that whatever agreement is reached will have to include a provision around the rolling back of tariffs. there is a lot riding on whether a phase 1 trade agreement can be reached and probably will dictate the amount of stimulus and support china's economy will need in the coming months. a lix alix: earnings better than estimated for wal-mart. revenue growth coming in lighter than estimated but still made a lot of money, $128 billion and most importantly the company boosting the full year earnings growth target but tend to do that in the third quarter. look at that as well.

and com sales beat as well over 3%. . we want to go to hong kong with chaos continuing a fourth straight day. public schools and suspended events canceled and a subway operator partially suspended service. the state own newspaper deleted a tweet it reported hong kong's government was expected to announce a curfew this weekend. joining me on the phone from hong kong is karen li from bloomberg greater china, government editor. i ask it every day, what's the latest, what's happened, what's next? karen: it's been a roller coaster and we had rumors this afternoon there might an curfew imposed for this weekend and has been shot down and another parlization of the transport system in the mornings and more protests and roads blocked in the central and middle part of the workday. it's the fourth day for this here and people wondering what happens next. one of the major things we've seen this week but differed from the previous month of

protest has been the emphasis on university campuses which have become battle grounds between protesters and police and the protesters being largely student led and the government school system being suspended through sunday which is the major news development for the day so what we'll be looking at especially headed into the weekend when protests get bigger is how many people are coming out and how violent it is and when will we see another full week of disruption like we've seen now? alix: thanks very much. germany nearly dodged a recession with a surprise growth of .1% and the economy weakness persists and daimler downgrading as well. joining us is the bloomberg economic reporter. walk us through the details of this narrow miss of a recession. >> so the german economy surprised us this morning by avoiding recession. it is actually up 1.1% and

seems like consumption was a large part of the equation and managed to avoid the recession, household and government spending jue grew and in a surprise, exports grew, both the domestic support is better than expected and the turmoil is not being reflected in german growth as much as previously feared but it doesn't change the longer outlook of the euro area. the european commission has downgraded the forecast for the year of growth recently. so it doesn't quite mean we're out of the waters yet. alix: thank you very much. and now i want to focus on wework because it continues to burn cash, reporting a net loss of $1.25 billion in the third quarter, more than doubling the loss from the same period last year. joining me from london is alex webb, bloomberg opinion columnist and tell us what about the numbers before the

i.p.o. was pulled? >> three numbers are important, the $1.25 billion net loss, more than doubling the net loss the year previously from earnings less than the losses, essentially. doubled revenue to almost $900 million but made a substantial loss on that and had a cash position the end of the quarter of $2 billion and that doesn't argue well if you expect the cross increase with their ability to get through the fourth quarter looks very difficult. you take into account the fact they're trying to make considerable head count firing a bunch of people. the likelihood of that costing a significant amount of cash are considerable so when you look ahead to this quarter you imagine the net loss might even be greater. of course it was the quarter that was supposed to be the i.p.o., the big coming out day and did not happen. it was the death of the company as we knew it in the sense we saw the c.e.o. leave and a huge management change and now we're talking about appointing a new c.e.o. and other names have

been mentioned such as the t-mobile c.e.o. jean legere and see where the i.p.o. was pulled and really kind of shocking increases in debt. i'm sorry, losses of that company. alix: alex webb of bloomberg opinion. now we turn to the fed, chairman jay powell pushed on the call for lower interest rates saying monetary follow is right where it should be. >> we do think monetary policy is in a good place but we'll be watching carefullyly incoming data and if developments emerge causing a material reassessment of the outlook then we'll act appropriately. alix: here in new york is michael mckey, the bloomberg economics and policy correspondent and did we

michael: jay powell accomplished what he didn't want to and explained criticism from donald trump and made no news. his goal today will be exactly the same. he stuck to script before the joint economic committee saying the economy is in a good place and suggesting the fed was responsible for the three rate cuts but no more cuts for now and will stay vigilant because trade wars and the slowing global economy remain threats. powell never mentioned the president, he did open his remarks by saying the fed and its officials are alings working for the good of the country. he wasn't talking specifically about the president's remarks but did say negative rates are a bad idea and countries who use negative rates are in economic trouble and with growth 2% and near record low unemployment he said negative rates make no sense for the u.s. he made a plea for congress to get its fiscal house in order because he said the next recession the fed doesn't have a lot of monetary policy room left and may need the help. alix, that's probably a comment he's going to repeat today and emphasize because he's talking to the house budget committee.

alix: indeed. chairman jay powell will be on the hill again and we'll have coverage of his appearance on the house budget committee on the economic outlook starting 10:00 a.m. eastern time. we want to end in washington where the house intelligence committee held the first hearing as part of the impeachment inquiry to president trump and signaled the battles yet to come and president trump spoke against the hearings called them a witch-hunt and said he didn't watch the testimony. president trump: i haven't watch for one minute because i've been with the president which is much more important as far as i'm concerned. this is a sham. and shouldn't be allowed. it was a situation that was caused by people that shouldn't have allowed it to happen. i want to find out who is the whistleblower. alix: joining me is our chief washington correspondent. what happens next? >> tomorrow more hearings set to continue as president trump pushing back forcefully against what was testified yesterday by

two career diplomats from the state department of foreign service officers. i was struck to see that no republicans breaking away from president trump. that's a clear sign that republicans are still very much standing behind the president and for now has not moved into a considerable area where the president would be removed from office. the votes aren't there in the senate. the president also signaling he's very carefullyly aligned with several of the members on the house bell intelligence committee most notably congressman jim jordan from ohio who really went after bill taylor and george kent, the two folks who testified yesterday. the republicans i've talked with described it as a political game and the star itnesses of the democratic hearing yesterday weren't even on the calls in question. today we're likely going to get the original transcript released from the first phone

call of president trump and zelensky and they feel they're building a case that will leave them no case for impeachment. there were headlines questioned coming from the senate. the senate intelligence committee suggesting the trial in the senate could last 6-8 weeks and that pushes this well into next calendar year. alix? alix: kevin cirilli, thanks very much. what was happening with wal-mart, earnings beat the top line revenue that came in light but did boost the full year earnings and growth target in com sales and gas came in better than expected and see no material change in the fourth quarter consumption and the outlook is a strong holiday season and they're looking at other areas to assess risk and don't have an update and stock up 3% and dragging up other retailers like target. coming up we'll have much more of your morning trade-in analysis in today's first take.

this is bloomberg.

alix: time for bloomberg first take. we'll give you the news and trading analysis of the markets. joining me from our in house team, gina martin adams, chief equity strategist and a former rates trader and voice of bloomberg audio squawk and julian emanuel from chief equity and derivatives strategist. vincent, two stories, one is the china-u.s. trade deal won't happen because they don't agree on ag and it's bad in china and you have to make a deal.

you're a trader, go. vincent: what i'm getting about the trade deal is we're sick and tired of hearing from unnamed sources about what's really going on. alix: this is the china ministry of sources. vincent: sources said phase 1 trade deal. the markets are tired of this back and forth and want something tangible to hold on to. we saw it yesterday. the markets are grinding higher very nicely, the news comes out we won't have phase 1 trade deal and market sell-off and afterwards traders are like enough of this. they'll get to an agreement eventually so let's stop with the nonsense and carry on. alix: you're of the mind set they're looking at chinese data that's not good and saying we have to get to a deal. vincent: no data is good is part of the reason why we'll get to a trade deal for these reasons. alix: what do you think, gina? gina: i agree, everyone is incentivized at this point to do something in the positive. even if it's incremental. i don't think we need to roll

back everything but incrementally move in a positive direction and that's enough. the other thing to acknowledge is trade is not the only thing moving markets. monetary policy has had a huge impact on rotation, the fact the balance sheet is expanding into the next year is very, very meaningful and when we run through the numbers you still have a lot of multiple support from the lower interest rates and not support from the fed. though you don't get what you want on trade the downside is more limited than what is pop arely considered. >> as the next trader i'm wary when there's a unanimous deal on this but i do agree we're going to get something signed with china. it may not be in the calendar year 2019. but if you look at it, it's this sort of paradox where the data is soft out of china but yet at the same time look at the price of pork, it's skyrocketing, the chinese need to buy agricultural products from the u.s. they're not telling you but they need to do it.

it's going to get them. vincent: to your point, too, getting onboard when everybody else is onboard would scare the hell out of me. but if you look at china inflation food prices, it's like this, it's a hockey stick. it's straight up. they need 20 buy and the story we got yesterday is they can't buy as much as the president would like to sell them. $50 billion is over the top. xi said last june to his conclave, we can't buy that much stuff. our refrigerator is full. we have nowhere to put it. we will buy but can't buy that much. they need to come to reality there will be a deal but not exactly what both sides want. alix: what if it's not a bad trade and unemployment raising in australia and japan data was terrible and you can argue the south korea and japan part of it, the retail tax will come into effect, there's that and you had daimler lowering the

full forecast and is a structural shift in the auto market and that's unrelated to trade. either signs you won't get material upside. any takers, who disagrees? gina: when you think what's the real sequence of economic data that's occurred throughout the year, the p.m.i. bottomed in the summer and you start to see generally improving economic conditions start to seep in and it's not a vast improvement but you also have the german economic data this morning that suggest maybe germany is not in recession and where we were priced. i think when you want a long term perspective, things are getting incrementally better and you do need some sort of stability on trade to continue that moving forward. julian: this is a little perverse but think there's something here. alix: i like that. julian: german data coming in north of the flat line probably is not a good thing. there's a school of political thought in germany that doesn't want to spend money.

alix: meaning no stimulus you don't have recession. julian: germany needs to participate. it lends the psychology that cause this is bump along improvement in the p.m.i.'s to some form of acceleration. vincent: you talk about china data and look at the german data and traders talking that's a little too coincidental. they just got over the line. alix: then again aren't we getting fiscal stimulus in japan? no one seems to care about that. vin vent: the fiscal stimulus issue is interesting because powell is speaking to the house today but the budget committee. yesterday he made comments about how fiscal stimulus in the u.s. probably has run its course because he compared it to how he was worried about the budget and how he was worried about too much of a deficit in

the united states. this is what is the thinking globally and what bothers germany and europe. fiscal stimulus in japan probably won't save the world. the two engines of growth that can save global growth is china and the united states. china is slowing the u.s. and just muddying along and we're on a descent if you will from 2018. it's as if the rest of the world has to really ramp up and that's not happening. gina: yet china and the u.s. is enacted monetary policy all year long and reverse course. the lag effect of that, if those are the two engines of growth will be stronger growth in 2020 than 2019 provided of course we don't have a political situation that implodes in the process. julian: listen to the fed chair. we're taking him at his word and he's been telling us for weeks the economy is in good

place. alix: let's listen to him. this is part of what he had to say yesterday. >> they're still slack in the labor market can be part of the answer. we don't know with any precision. it could be the neutral rate of interest is lower than what we're thinking and therefore our policy is less accommodative to what we're thinking. we're letting the data speak to us. alix: what about the idea of letting data speak to you. feels rom that, that devilish. vincent: j-powell would love people to take their eyes off the fed. they're not doing anything on the radio -- on the interest rate and the key is to continue to work behind the scenes to make the money marketing function smooth and they have a month until the next challenge which is the start of the turn of the year and we think they'll do a good job. the balance sheet is expanding.

alix: and the data speaking. isn't that a weird sentence. thank you for joining us. and a reminder, find all the charts we'll use throughout the show on gtvgo. coming up, wal-mart up in premarket. it's a beat and a raise for the company. we'll break it down. this is bloomberg.

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♪ alix: wal-mart shares up in premarket boosting its adjusted earnings for the year. chuck of gordon has cut, senior analyst has a buy rating and $135 price target. what was your biggest takeaway from the earnings report so far? chuck: the comp was up 2.3% and digital sales are up 41%. so really good top line growth

and equally important is here on the profit margin line which is the key metric everyone is watching they basically came in flat and u.s. inventories are under cross control. wal-mart had a very healthy third quarter. alix: what was the quality of the beat? we mentioned a lot in the third quarter they always tend to raise guidance. what was the quality here? chuck: that's a good question, it came in lower wolde wide led by sam's club. i would probably rate the quality and say a b to b plus. we think the key focus here is not really so much on the earnings but more on the top line here. alix: what retailers does it ed well for or does not? chuck: the discounts based in

general. at wal-mart it's been the online grocery business that continues to do well and quite a benefit to target mostly and dollar general, dollar tree would be another bucket to site. alix: what is the question on the call? chuck: probably clarity on the u.s. profit margin line. they talked about the negative being a little bit more price investment but mixed in the supply chain. the key for wal-mart is can they continue to grow their tidge cal business but also curtail the losses on the digital side. alix: thanks a lot. chuck grom of gordon has cut coming up. we're on 3100 watch for the s&p. this is bloomberg.

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♪ alix: this is "bloomberg daybreak." i'm alix steel. in the markets we've had a nice rally in treasuries as well as bonds. over in europe the yields are lower and the equity market a

little bit of lightness but the dax is what i want to highlight because that's the underperformer in europe. germany avoids a recession but daimler coming in having a lower guidance, so that is weighing on the index. in other asset classes, the bond yields moving lower as money flows in with 22 basis points in the 2's and 10's and the dollar yen is down .2% and japan growth data came in very poorly and some say maybe it's not the worse thing because it won't follow a lot from here. either because you slice it was a grim outlook when it comes to japanese growth. earnings are trickling out. cisco gave a totally failed forecast that fell far short of expectations and blamed it on a slowing global economy. the c.e.o. chuck robben told analysts you go around the world and see what's happening in hong kong and china and d.c. and brexit and uncertainty in latin america and a business

suffers when there's lack of clarity and it's been here so long it finally came into play. when you look at that, is that a cisco problem, just that slice of business or is that where we're headed? >> it's a bigger problem. the numbers recently, the capex numbers printed negative at the last reading and that tells you, and we see it in the c.e.o. confidence numbers there is a his tans to spend in business which again makes it all the more incumbent for there to be at east some sort of deal to have an understanding, whatever cursory the rules of the road and given this fall in capex you're at the point you need to spend for replacement capex in 2020. alix: how do you make investment decisions based on that?

it had been about value and small cap so what should it be? julian: in the near term we think you hit the nail on that. it's a little confusing now which is why again in our view, in the near term you may have a pull back and there's less negative baked in and there's a lot of politics going on in washington and that's not a market positive. but bigger picture, the belief is that particularly coming into an election year that politicians, whoever they may be, wherever they are, will take action to cause the potential for the economy to surprise the upside. and that, you know, argues for what we think started this value rotation with the bond yield lows the end of august which in our view major significant, perhaps actually year bond yield lows and the bursting of a bubble really and

that changes the psychology towards value. alix: i was struck by john arthur as he writes for bloomberg opinion, earnings matter less and rates matter more and rates are swamping any signal we might receive from earnings announcements at least for now and isn't affecting importance of earnings in the long run but confirms a common sense intuition -- and short rates seem to be driving everything. if your thesis holds and we've seen the bottom and the bubbles burst that's a consist enterostation to value? and if so what do you make the last couple days? >> if you look at it going back to october, the rotation, call it enter fnks financials and out of consumer staples has been pretty vicious on the subservice of a tape trading on a vix of 1 and index that made new all time highs. it's logical there's a bit of pause there since we're not sure where the trade talks are.

from our point of view it's likely to be about the money and if you looked at it last week you saw outer bonds funds at some likelihood you'll have a butt more outlook in bonds and out of stocks. alix: energies, small caps, financials, where in value? julian: you just named it. the thing about it, it's easier in some ways because the valuation discrepancies in places like energy, where you think about it, you have a couple pieces of news that are counterintu differencely buy south carolinales you'll have the huge i.p.o. from saudi arabia sort of clearing the decks for investment and at the same time you have the norway c.i.o. announce his retirement. they've been divesting out of energy stocks. it's a very unloved space. we think it's time.

alix: ok. hold on one second. sorry. getting some guidance here. s vice chairman finance minister of germany. we want to listen in. >> one of the comments after the g.d.p. news said germany was still in the danger zone. do you agree with that? >> not really. i think we always described the situation with something like cautious optimism. and if you look at all the data from others you will understand there will be growth even if better growth next year. anyone knows what difficulties are coming from. they are the results, the lost of the boost, the momentum in international growth with mothersly affects

to the thrade tensions we have. though it's a difficult situation, it is also something which gives us another reason for optimism because stopping this trade tension is something politics could do and in the end it looks like they will have the chance to do it and could a bigger impact on growth. looking at the german economy hich is resilient and globally , you have to understand if there is slower growth in the world it has an impact on germany as it is obvious on the end. he other hint, we have spurred unemployment and some of the people aren't able to serve demands and there's still a request for labor in many sectors of the economy.

i think we should understand it is necessary to see we are on a path and a slower growth but not a crisis. >> elusive fiscal policy is something governments can do, even politicians can do in germany. there's been much debate around a fiscal stimulus. the budgets are at a key stage n the process of next year's budget today. does this economic news put an end to the discussion about fiscal stimulus in germany? >> it could have an effect in this direction but some people in the public debate are always repeating what they said since 1960. so they don't look at the environment. >> i'm happy for you to say something new. don't worry. >> many always saying the same things. they have ideas about the question and don't look at the figures and always use them for saying the fame is from before. if you look at the economy in germany, you understand where

we have the problems, from the development of global growth but on the other hand we a strong development in germany and this is also something that has to do with government strategies. we have the very expansionary fiscal policy and we increase the public investment to an all-time high and a growth of 8% this year, if you look at the last 10 years, this is the highest expansion we have had since a very long time. and if you look at the figures just of the federal budget and look at the next 10 years it will be more than $400 billion euros of public investment already in planning and we have an extra investment referring to the climate change and 150 billion euros the next 10 years and all of a sudden we have

something more about 550 or 600 billion euros the next 10 years. then if you look at the ideas of economists which they put to the press and give an article they're speaking about 800 billion euros in the next 10 years we should under take. we are doing. alix: that was the finance minister scholz in berlin. follow it on live-go and we'll discuss it. julian emanuel. if i was a fiscal person and betting son something in germany, i wouldn't take the bet. that's not what you want to hear. >> scholz is telling you two things. number one the fate of the german economy in 2020 is reliable on china and the u.s. doing a trade deal and we've

known this and for us remain optimistic about 2020. the other thing he's telling you is that madam le guard has her work cut out for her. >> entering the buildings of coalition and doing anything different? julian: whether it's point 1 or negative point 1 we think germany will realize if you're running a 10-year deal of minus .3 you can spend more money than you think you'll spend and that's key. alix: to wrap up your view on value and the stimulus, you entioned about a voluntary currency and we're talking about the vix and you're basically looking at higher six six months out than you were today it. do you trade this, what do you do? >> sheanly a positive. the kix tells you people are ok

-- the vix tells you people are ok with the president. number one, the fact the fed has completely transitioned from quantitative tightening to increasing the size of the balance sheet has a recalming effect on volatility. q.e. o coins convince accounted for these spikes in the six. the other message is it you look at the options market there's a lot of concern going out a year, no coincidence it's the election. that kind of concern will ultimately give way to higher prices. alix: how do you take advantage of the rolldown? e're not a director of six here, if the fed can allow it to remain low, for us to take advantage of it is to look in the requirement and my between

sector and tooks and play along. alix: julian emanuel will stick with me. and talk about a curve, an oil curve going nowhere. coming up, young i bankers, especially women, are showing a graphics and f in interact with us and go to tvgo on your terminal and scroll through and you can look at it. this is bloomberg. ♪

♪ >> this is bloomberg daybreak. i have your bloomberg business flash. the owner of gunmaker smith & wesson will split in two

companies, one will be focused on firearms and the other on outdoor products. american outdoor brands is trying to reverse the stock market decline at a time when there is pressure for more gun restrictions in the u.s. shares have fallen 39% this year. one of the biggest cannabis companies is prepared for a longer period of sluggish returns. we smoke to harvest c.e.o. steve white at the cannabis conference in boston. steve: we have unlevered real estate portfolio we can use to get money on our balance sheet. we also have very little debt so that is yet another option. at these prices, equity is a little less attractive for us at the moment but it is also an ption. rupita: in new mexico they're sizing up the potential for legalizing marijuana for recreational use. a legalization effort has been

stalled once this year. and the c.f.a. institute is giving a break to students in hong kong and because of the protests it delayed its level 1 exam by three days to december 10. students can also get the full refund, take the test at another location or hold off until next june. more than 3,400 people are registered to take the first part of the c.s.a. exam. and that's your bloomberg business flash. alix? alix: we cover three things wall street is buzzing about this morning. again-z banksers are disenchanted by equity. those who hit the desk are not interested in the hiring process and wework with a difficult chapter after the co-c.e.o. described his third quarter with a loss of $1.3 billion and door dash raising millions and the investors value it more than $13 billion.

joining us now, julian emanuel is with us. let's get to the interesting survey about investment bankers and what did we learn? >> this was interesting from odyssey search partners and was a contrarian view. the idea here is buy private equity going to banks earlier and try and hire people in august before they hit a investment banking desk and many aren't ready when i asked why a lot of women aren't ready and he said the mostly male class knew they wanted to do private equity forever and may be ready to go into private equity and tell k.k.r. they're ready for this but maybe the princeton history major may not be ready. alix: at 25 i didn't know what i was doing. give me a career and pay me for it. >> with adds 300,000 offer. alix: what's it like to hire people where you are?

julian: with the right talent and right situation, it's doable. having a 20-year-old kid that just went into sales and trading, you can understand the recent sense. -- the reticence. the life commitment to private equity we know the hours are very burdensome. look, at this age you should be looking around and thinking about the world and quite frankly, if you look at sort of what we've seen in the headlines over the course of the last several months with regard to i.p.o.'s being difficult so on and so forth might cause you to pause and reconsider. alix: talking to a partner who does renewable investing and she's saying she has no one to hire because she wants people with years of experience in the space and there's like nobody there. >> i have to wonder this, too, if you're a firm bidding so aggressively against these almost investment bankers. they're so young and don't know

anything yet. i don't understand this but then i'm not hiring anybody. alix: you brought it up, let's go to we work and we learned they have a big loss, and it keeps growing and obviously is before scrapping the i.p.o. what did you learn. >> the loss is staggering because they were trying to grow so aggressively at a time they were burning cash and we were reporting they were running out of cash and trying to grow money and they had to grow so fast to make their growth possible and get the last minute funding. and their occupancy rates are lower and how they handle the growth as they pivot the company will be an interesting balance. alix: what do you make of the whole wework thing? julian: growth at any price does not work anymore. it's an unsound investment thesis and even more unfound business coninstruct thesis. and if anything the fact the

broader equity market is doing as well as it is this year despite the fact you had these high profile unicorns run into trouble tells us it's a rational capitalization process and these companies are being punished. >> leave something nice for john legere to take over. alix: wonder what color the t-shirts will be. the third story is door dash which raised money and you had an article talking about all these v.c. fundraising more money, too. i don't know it totally feels like we popped that? >> i think you're right. e wework versus doordash shows the money is not leashing v.c. and there's big money in doordash and softbank and sequoia and code 2, for example in this and there was a report that door dash was seeking a $400 million credit

line in addition to the funding from jp morgan to prepare for an i.p.o. so whether door dash i.p.o.'s will be interesting in this market. alix: i wonder if you're more selective because you had an article in the journal that talked about how venture capital funds are drying up and you see e.b. startups changing the game there. maybe it just depends on where you're at. julian: totally depends. in this case people love to eat and have their food brought to their doorstep. that's a business model that hopefully, and we've seen it before in the past, there is a road to profitability x years down the line but they'll have to articulate it. they may get the funding now but the clock is ticking in terms of how you get to profitability. alix: i appreciate it when you two are on the set. i thank you. and in today's women of wall street as we look at women moving and shaping the world of finance we focus on the

equality network, 100 women in finance and started out 18 years ago with three women in the new york hedge fund industry and now there are more than 15,000 members worldwide. carol kim is blackstone's head of asian relations and development and she spoke with bloomberg. carol: i think it's great we're working on the pipeline. but this group of women we're introducing in the industry, they need to be able to have a role model, just a couple runs ahead of them. in the past three years in asia for blackstone, for example, the number of women in principal and nanging director in investment and investment relation roles have doubled. and the number of women we brought in at the analyst level as really increased from 15% in 2015 to 40%. alix: coming up we'll look at

the dollar and real earnings coming up in today's trader's take. and if you're headed out and jumping in your car turn to bloomberg radio on channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: time for trader's take. joining me is vincent. listen to him every day on the saqa .go. i didn't know they correlated? vincent: correlations wax and wane but yesterday we had real average earnings and it's my favorite indicator, disposable income, what's in your wallet? this is what you have to spend. and the other thing i want to point out is it you look at this, it looks like average earnings dipped from the month before and people love charts and love to look at charts and we have an expression on the street, every sunken ship had a chart. the reason it looked like it

dipped is because the month before it was revised higher. it is flattening out now and the question is does real average earnings continue to drop and did disposable income continue to drop? if it does we're likely to see a drop in the dollar and this could be, we know where we've been two years and we may be reaching a point where e.m. and high yielders start to replace the u.s. dollar in 2020. alix: this is a conversation i feel we need to have every day. how much closer are we? vincent: we can. but it will throw it over the edge in the trade situation and people will look to e.m. and not the u.s. dollar. alix: thank you very much, vincent. we have other guests coming up. .

♪ alix: welcome to "bloomberg daybreak" on this thursday,

november 14. i'm alix steel. here's everything you need to know at this hour. let's take it from the top. chaos in hong kong for the fourth straight day. >> this is been a real roller coaster of a day for us here. we had rumors in the afternoon there might be a curfew imposed this weekend. those rumors seem to have been shut down. alix: some companies tell employees to work from home as speculation is spreading about measures the government may take to stop the violence. pres. trump: china wants to make a deal, i can tell you. alix: there's no way hold up in the trade talks -- there's now a hold up in these trade talks. >> china needs to secure a trade agreement with the u.s. that includes a provision around the roback of terrace. alix: the issue -- the rollback of tariffs. investment is growing at

the slowest pace in two decades. industrial output is sluggish, too. there hasn't been flooding like this in venice and have a century. tourist spots -- in venice in half a century. tourist spots are underwater. pres. trump: this is a sham, and shouldn't be allowed. alix: the first day of public impeachment hearings ended with sharp battle lines being drawn. kevin: tomorrow, more hearings set to continue as president trump pushes back forcefully against what was testified yesterday. alix: testimony shows how president trump abused the power of office. republicans say there have only been secondhand accounts of the president's actions. in the markets, still seeing a move into bond markets in europe. german finance minister olaf

sholz says the german economy is not in crisis, avoiding a recession, but narrowly. joining me for the hour is romaine bostick. it is like all of those stimulus bets. not so much in germany. romaine: we know it is going to germany from shake that mentality. mean, when you talk about the global growth story and whether there is even some sort of synchronized global growth story, you look to some of these countries like germany, everybody is looking at china, and you saw the market reaction when he saw those trade headlines. you see a market that is really still very weighted not so much in trade, but just the global economic ramifications, and how tide and unified these nations are, if at all. when you hear what is coming out of germany, you are going to

have a market that has to reassess where we are going. alix: one are my favorite statements yesterday from fed chair jay powell on capitol hill, saying he is satisfied with current monetary policy and keeping a watchful eye on the data. chair powell: there is still slack in the data market. that can be part of the answer. we don't know with any precision. it also may be that the neutral rate of interest is lower than we've been thinking, and that therefore, our policy is less accommodative than we have been thinking. so i think we are letting the data speak to us. alix: joining us now, sam zell, equity group investments chairman and founder. always good to get you on set. sam: thank you. good to be here. alix: sam can get kind of feisty, so be prepared. [laughter] alix: i wanted to play that powell sound because what struck me is that maybe things are worse than we thought. maybe the neutral rate is lower.

maybe growth isn't going to happen the u.s. maybe we don't get fiscal stimulus out of germany. how to someone like you look at it? sam: i've been in the last year expecting a recession. despite all kinds of wonderful headlines come the reality that i've seen in the companies we run in the businesses we do suggests that's not the case. think the united states can be the only nice place in the world, but i think at the moment, the economy in the united states is doing ok. not great, but we are a long way from recession. romaine: but is ok going to be good enough in the long term? the concern is that even if we don't head towards recession, we could be seeing some sort of prolonged area where growth is

just 1%, 2% for a prolonged period of time. sam: like the obama years. romaine: well, obama did a little better, particularly towards the beginning of his term. sam: not really. when you look at the eight years of the obama period, wealth distribution overcame growth as an objective. i think that this country is designed for growth. i think that anything we try and do that doesn't promote growth, which is -- growth, it is ultimately not going to perform. romaine: do we focus too much on that headline gdp number when you have a country this size? does it really matter if we are at 5% or 6% versus 2%? sam: if we had 5% or 6% growth, you would know it. we would be having a very different type of conversation. i think the focus on growth is very important, but i also think

, and we've learned this in the last year, we did quantitative used thed dramatically fed to buy debt. we then reversed the policy and started buying back the debt and reducing the amount of debt we owned. as a rise in interest rates. you had a combination going until powell made the cuts that the body of debt out there was being shrunk by virtue of the government taking it in, and at the same time, interest rates going up. you had a double whammy going on at the same time. alix: if we are now in some type of quantitative easing, or just not quantitative tightening, it has done good things for the mortgage market. we've seen lots of refis.

in new york,erhigh into rebecca, for example. tribeca, for example. what do someone in real estate like you do? sam: anyone in real estate has had a tough time generating yield. which eqr isor in the leading company has record rent, wreck you'd -- record rent, record occupancy. refi has done better than expected, but not where it was five or six years ago. romaine: what about other areas outside of residential and office space? we've seen a lot of activity with regards to warehouses. there were big blackstone deals. there seems to be a bet on consumer spending. sam: i've been in the real estate business for 50 years.

whenever anything becomes the flavor of the month, oversupply can't be far behind. anything you read in the last 12 months talks about industrial warehouse construction. i have no basis for this comment other than my nose, which says that we are going to have an oversupply of warehouse space because everybody is building warehouse space. i think the retail component of real estate continues to be a falling knife. i don't think anybody knows how far down retail is going to go. as far as office space is concerned, i think we are looking at a significant oversupply, and i think the whole wework thing is going to be a major contributor to that. alix: which we will definitely drill down into more and what that means. is there a go to real estate for

sam zell? like, ok, if we get to a certain level, i will pull the trigger on this? sam: i think the go to place for us is probably patience and discipline. i don't see any area of real estate that would require or demand attention or over allocation. i think the real estate business today is best described as benign. alix: do i want to sell my apartment in brooklyn right now? [laughter] sam: do you want to replace it? alix: yes, i do. sam: that's the problem. alix: so i can sell it, but i can't live anywhere. sam: you can sell it, and then maybe use the proceeds to buy the same apartment. alix: that sums good. sam zell of equity group investments will be with us for the whole hour. coming up, we company reporting

net loss for the third quarter. what that mean for the broader markets. this is bloomberg. ♪

alix: the hits just keep on coming for wework. third-quarter net loss of $1.25 sillion it clips and sale and more than doubling losses in the same period last year. joining us is leon kalvaria, citigroup chair of institutional setnts, and joining us on is bloomberg's sonali basak. what does wework mean to sam zell? sam: the good news is it means nothing to me. [laughter] because i'm not

in the office space business. but if you look at what wework has done, and the other co-working companies, they have filled up most of the office space that was vacant in the united states. that itllary to that is has precipitated the construction of a whole bunch of new buildings, and those new buildings were built based on the existing supply was completed. whatever wework does from this point forward is not only going to have to let off a lot of employees, i think it is going to have to shrink their footprint. as they shrink their footprint, we are going to find out how in-depth the growth in the office market has been. i wouldn't be surprised if, by the time the shrinkage is complete, we will have a significant hole in the office space demand. romaine: we've also seen, and

leon, we can bring you into this conversation, we've seen some of the more established players, the ones who didn't really identify as tech companies identify themselves as real estate companies. they've sort of convinced a lot of their corporate clients that there is a market for this if you just get over some of the chattel. do you see that as investable from your perspective, that traditional model? flowery,a little more the wework type model? leon: sam, being the expert in the space, i look to his guidance from the realistic perspective. verynk wework did a interesting job about growing a global brand. there was an element of that that was important. i think the co-working space is something that is here to stay. if you look at the spaces around the world, i think co-working is

here to stay from that standpoint. the issue will really become valuation. what are these companies worth at the end of the day? what happens to supply/demand in the actual space? from my not least, standpoint, employees losing their jobs is a sad outcome of some of this, and that is very unfortunate. sam: but you're talking about a business where there's no barrier to entry. them, but ife of you go back to the 1950's, it started with the first one who did the equivalent of a co-working space. they went broke, followed by headquarters. it went broke, followed by regis. broke, followed by wework. broke, followed by wework. it went broke. tell me about a model that works

when every player in the space has gone broke. it is just a question of when. sonali: with this overgrowth, what do you thing about office prices? do you think prices are just going to collapse across new york? sam: i don't know whether prices are going to collapse. the real estate industry has never been healthier from a financial point of view then it is today. on, we are talking about hudson yards, brookfield, penn central. you are talking about yesterday, jamie dimon announces a second building. the good news is he's not going to have any competition because there's going to be nobody else around him. but the bottom line is you are talking about enormous new supply of space, and except for ,o-working, which, by the way restaurants in san francisco were doing co-working in the day

, soho club is now doing a space , there's a club in chicago that now does co-working during the day, there's no barrier to entry. the question is, can you buy good enough coffee? leon: of course, before that, what you thing about ghost kitchens? that's the next element of this. what happens again, some of the space is getting -- and a small percentage, sam -- some of the space is getting repurposed. i would never have guessed five use ago concept of a ghost kitchen producing food and putting it out there for delivery, as you were talking about, sonali. sam: how many co-working spaces do you need? what's the definition of a business where the alternative is a plug at starbucks? romaine: for just staying at home. sam: well, that's not cool. [laughter] sonali: i know leon is a bit of

a wework bull, so you are the bear case here. sam: i always have been. sonali: so what you think it ends up in, bankruptcy? sam: i don't know whether anyone can run it profitably, but ultimately, it is going to come down to how much money the softbank have. got they got -- if they've limited money, wework will be able to survive. will they survive and make a profit? unlikely. romaine: but this is more than just about softbank taking it on, too. they are shouldering a lot of the response bloody off to bondholders, something like $5.5 billion -- of the responsibility off to bondholders, some thing like 5.5 billion dollars. so there is appetite for this. sam: don't confuse appetite with aptitude. alix: basically, there's animal spirits out there, right? or not?

leon: there may or may not be. the softbank investment is not totally out there on the marketplace, so time will tell exactly what they have put into the company and how it is going to work, and time will tell point, whatn sam's happens to the cost structure or not. my basic thesis is that the co-working has evolved dramatically over the years, and i think that if you look at corporations, i think there's 30%, 40% of businesses that are going to become more corporate from that standpoint around the world. does that shrink during a recession? who knows? some of these things are unproven right now. but the basis, they seem to be full from that standpoint. there brand is interesting. so it is a question of value, investment, and what happens in a downturn. sam: what is the definition of full? last i checked, wework was ntfering one year free re

on a 90 day lease. leon: you will know it a lot better than i will. i will give my supposed view, and you will know more in death -- my simple stick view, and you will know more in depth. alix: all of you are sticking with romaine and i. u.s. consumer taking an unexpected pause in september. this is bloomberg. ♪

♪ ritika: this is "bloomberg daybreak." burberry is teaming up with china's tencent to explore social media friendly stores. the british luxury brand reported earnings that beat estimates, helped by a new look

for burberry. walmart is gaining momentum into the holiday season. the world's largest retailer has raised its full-year forecast again after posting better than expected comparable sales for the third quarter. walmart says the number of customers and the size of their average orders were up. that is your bloomberg business flash. alix: thanks so much. for more on retail anticonsumer, groupll, equity investments, leon kalvaria, citigroup, and with us still, sonali basak. leon: i think retail, as we were talking about during the break, in some areas is worrisome. i work on madison avenue. you walk up and down, and it feels to me half of it is empty. so what is the outlook? uncertain, because no one has been able to explain it. on the other hand, e-commerce

retail continues to thrive, whether it is going through amazon or native e-commerce players. the ability to get to market for those folks is very good. i know you commented before on warehouses, which is interesting as to whether there's more and more of that. the fact is, native e-commerce will continue to thrive. the ability to build brands without massive brick-and-mortar is around. i think it has evolved from a retail standpoint to breaks -- two brick -- to bricks and blicks. you have a retail people can experience, and that a lot online. whether it is a pop-up or something more significant, retail has got to offer an experience. people have got to go in there and really enjoy themselves to use it as a destination as opposed to sitting at home and clicking. romaine: when you talk about the continuation of the e-commerce side of retail, the need for some companies to have a physical brick-and-mortar location, you talk about a

company like peloton, which has some stores soup can see its bikes. you have a lot of online --ailers so people can online retailers that set up a shop so people can touch and feel their close. is that going to replace the more traditional side of it? you are already shaking your head, sam. sam: not even close. in chicago, we have a whole bunch of those stores. but they are not selling. romaine: and then they are building a four-story starbucks. is a four-story starbucks enough to make up for what was there before, a crate and barrel or something? sam: not likely. arebottom line is we training people to buy what they really want online. we have all these programs where we will send you five things, send four back. they still need places where

people can see and touch, but that is 1/10, 1/20 of the store coverage. it wasn't long ago when the gap use to open 100 stores a year. now they need three, and that's only if there are three good malls to put them in. alix: so more m&a? is that what is going to happen? leon: i don't know. the history of m&a in the sector, at least for traditional retail, has not necessarily been that good, so i don't see it. sam: it's primarily been a real estate story. i've got a bunch of great leases with cheap risk. alix: we've got to leave it there. we are going to look at opportunities in energy next. this is bloomberg. ♪ ♪

alix: alix: you're seeing another performer in germany.

in other asset classes, as we wait for the latest eco-data read, we are still seeing a move into bonds in the u.s. as well as in europe. the yen higher despite the fact that japan has weak economic data. china also has weak data as well. ppi breaking just now. the producer price index if you back out food and energy coming in 1.6% year on year in october in a month on been -- a month on month basis coming in .1%. romaine: that is inflation, right? alix: i feel like this is a redox from yesterday. be nine inflation. my sarcasm did not come through. when you look at the month over look, it is above what the surveys look for but it brings us nowhere close to what the market was looking for. we were just talking last week

about going back above 2% on the 10 year. if you look at what breakevens have done, you have a market that has lost its senses for the past two to three weeks and over the past days you realize this is not an inflationary environment and the conditions for inflation are not there. alix: unless you put in food and energy, then you wind up getting some inflation, .4% month on month, and that leads us to my favorite topic, energy. opec signaling oil markets will remain on course for a surplus in early 2020. global supplies will exceed demand by 640 5000 barrels a day in the first half of the year. zell and bloombergs sonali basak still with romaine and i. sam, are you buying what everyone is trying to sell? sam: there's a big difference

between oil and gas. is in muchuation better shape with supply and demand. i also think that the amount of capital available in the oil patch is disappearing. i compared it to the real estate industry in the early 1990's, where you had empty buildings all over the place, nobody had cash. that is very much what we are seeing today and we are seeing deals in the oil patch that are dramatically better for the investor than anything we have seen in the last 10 years. in the gas space, a lot depends on where. approaches -- is weak and weaker. aboutody keeps talking gas being three dollars. meanwhile, gas keeps going

closer to two dollars than three dollars. there is an awful lot of supply. some of the things happening lng, which was going to be the savior of gas, the fact that the russians got the second pipeline approved last week means an awful lot of gas will go into europe. you have to separate oil from assets say gas and gas are a lot less attractive than oil assets. sonali: speaking of oil and gas and monday, citigroup has been -- speaking of oil and gas m&a, citigroup has been -- leon, what is your outlook on what is possible in this market? leon: not commenting on occidental, i think our outlook for the market is relatively benign.

if you look at the standpoint of energy pricing right now, especially on the oil side, with plus or -60 on grounding depending whether you are not, ourbout texas or outlook does not look like there is a huge amount of pressure. what you are seeing is in certain cases, rigs being taken down. if costs are too high from a drilling standpoint, people are taking down rigs and running for cash and preserving capital. people are trying to be careful and ensure they have the cash flow to be able to get through this, especially on the cost basis. sam: the oil business has unique lease feature. leases andple get then they are obligated to drill. we have a lot of situations we are seeing where companies have andsted a lot of money

leases do not have the money to selling the cash flow in order to get capital not to lose leases. alix: sam, are you buying any distressed assets? where? texasalifornia, colorado, so far. alix: to they come from distressed players like chesapeake or are they smaller than that? sam: no, interestingly enough. so far, what we are seeing are situations where companies are taking steps in anticipation of problems rather than responding to problems. alix: you are buying assets from companies before it gets too bad? sam: yes. alix: are they selling at buyer sale prices? can you give me more specific examples. are you buying oil or gas assets? sam: oil.

alix: just a share or a broader array. sam: a broader array. this is like 20 questions. alix: from that point you also create calpine energy capital. sam: that was a deal where the seller on that was a big company not in trouble but not liquid. ways toe looking for get somebody else to put up the money to keep the game going. alix: who do you lend money to? sam: i do not lend money to anyone. i by assets. -- i buy assets. you could call it lending, but it is the land to own business. they are called loans, but it is basically equity plays. our deal is exactly that. sonali: this is interesting because you have investors like

you and tom going into the market and investors like carlisle who has lost a lot of money. i am wondering from both of you, will we see more zeros? what role does private capital player in this market? sam: you have to make a distinction. a company like carlisle cannot do what i do. i do little deals, filling in little slots. they have a much bigger scale issue to deal with. that forces them to make much bets, bats -- much bigger and in the current environment those are worrisome. sonali: you think blackstone will have the same problems? sam: i do not opine on other people's issues. leon: sam, who i have known for three decades, has always been a thoughtful buyer and noninstitutional. he can operate in places and has the ability to invest without

necessarily worrying about an exit or a timeframe or investors in this is well-suited, if i may say. and allows you to go in pick up pieces. 10 million dollars, $30 million, it does not bother you. sam: may beat as $100 million. i do not have the same timeframe, the same people to respond to. leon: that is why it is uniquely set up for someone who is incredibly entrepreneurial and knows how to make contrarian bets over a long history of time. it is probably a little bit different when you're putting large amounts of capital to work. weaine: most of the pieces are talking about is in the u.s. and north america. what about outside of north america? leon: outside the region you have some level of activity, but a lot of the activities in terms of the m&a is inside the u.s.. there been some asset sales, but a lot in the u.s. sam: in the u.s. today, the

classic oil and gas measure was 10% discount rate. deals 14% looking at to 15% discount rate. sonali: would you buy aramco? sam: probably not. i think aramco is an enormous company. i cannot imagine the definition of what it takes to move in a company that size. when you look at stuff overseas. we've been getting a lot of inquiries from overseas situations. the u.s. is 15. if you will deal -- if you would do a deal in brazil, what you have to get to include the risk of foreign currency? that is a key point. you cannot use the same discount

rates. we can argue what the number is, but it is not the same. it varies by country and the nature of the assets. alix: leon, how open will the capital markets today from an m&a perspective, from ipo's? is the market open? leon: the market is open and it will be open in specific situations. people will evaluate them on a case-by-case basis and see what is the cost basis, what is the outlook from a cash flow standpoint, etc.. the fact of the matter is we do ak, at least a high point in terms of the market. there are plenty of investors sitting in the market looking to put money to work in a zero to low rate environment. we have not discussed that but that is critical when you have a 10 year at 1.90. not a lot of options for yield. romaine: when you talk about the

chase for yield and the chase for any sort of return that is commensurate with the risk, there a lot of folks who would say there are opportunities out there. as long as rates stay tethered to this range we have been in, that will be support enough good leon: correct -- that will be support enough. leon: correct. peak, at a high. where are your alternatives for investing, other than leaving it in the bank. sam: leaving it in the bank runs you at risk for negative interest rates. sonali: i know you've been selling a lot of assets. are you selling out of real estate and into oil? how do we think of your overall way of looking at the world? sam: i have never thought of it in the manner you described. i've always that it -- i've always thought of it of moving from place to place where i think there is unique opportunity. everybody always asks what

markets are you in? we do not buy deals. i think our decision-making process revolves around the individual assets and what their conditions are and whether they in thatactive enough specific risk environment. sonali: where don't you want to be anymore? sam: i do not know that i make those kinds of decisions. sonali: what is your happiest sale? sam: the answer is i sell when i think the opportunity is better for me than for the person buying it. sometimes that is true, sometimes it is not. cell times, you can have a where the seller and the buyer both get a good deal. ino not try to get caught up schaeuble is and try to focus on individual opportunities and what makes them different than others. alix: just around out this part

of the conversation about capital markets, leon, i would love to get your thoughts on hong kong and what you think the financial world will evolve in that area. leon: hong kong is something -- unlike some people, i'm not qualified to comment. a lot of other people have given their commentary. we have been to hong kong many times, we have a great operation , a lot of people doing business in the area. time will tell how everything evolves. from a business standpoint, we are open for business in hong kong. we have a significant number of folks there and we will continue on. politically, i'm not qualified to comment. alix: any thoughts? sam: i like his. leon: you can take my answer. alix: talk about distress. how do you think about stuff like that? sam: the word distress has the word market after it. i do not think there's any market in hong kong and there will not be one until there is

some level of stability. if i'd ask you 14 weeks ago how long you thought the hong kong thing would last you would've said a couple of weeks. alix: totally. sam: a couple of weeks ago it would've been a couple more weekends. now weekends have got into weeks . i don't know. i do not know what is supporting all of these people. you saw things like lvmh yesterday that said their sales .nd hong kong were down 45% is the entire retail base in hong kong, which retail is very big part of it, is being destroyed. the question is will it recover? will hong kong ever be the hong kong it was? what will the chinese do?

it seems to me they cannot afford to walk away. to they also do not want create another tiananmen square. it took them 30 years to get over that. it is very much open. certainly not a place i would want to invest. alix: leon of citigroup and bloombergs sonali basak. a pleasure to have you on set. sam cell is staying with me and romaine. tune in to bloomberg "commodities edge" coming up at 1:00. i will be talking about oil and saudi aramco. coming up, the 2020 white house race and how what we are hearing on the campaign trail can affect taxes and private equity. this is bloomberg. ♪

ritika: one of the biggest cannabis companies is prepared for a long period of sluggish returns. we spoke to harvest ceo steve white in boston. unlevered real estate , significant unlevered real estate portfolio, which we can use to get money on our balance sheets. we also have very little debt, so that is another option. at these prices, equities are a less attractive at the moment. it is also an option. mexico,meanwhile in new legislators are sizing up the economic potential of legalizing marijuana for recreational use. the legalization effort has already stalled once this year. democratic presidential

candidate elizabeth warren is blasting goldman sachs. she is upset with goldman's claims bias decision-making against women who applied to the apple card. gold been unhappy customers to look at credit limit decisions. elizabeth warren said women have been discriminated against by number them and it should not be up to them to call goldman to straighten it out. alix: one of the things we have also served -- one of the things we've also heard from senator warren is a proposed wealth tax. sam cell of equity group investment is still with us. and elizabeth warren presidency and you have health care and tech in your private equity, which sector you most worried about? sam: all of them? alix: specifically, what worries you about each? sam: i do not believe elizabeth warren can execute all of the plans she is talking about.

i think the fact that all of her plans do not make economic sense, and do not work make all of them dangerous to the u.s. economy. romaine: do you worry a lot of her plans, or at least the impetus for her plans are shared by a lot of other candidates? even if we do not end up with an elizabeth warren, if we end up with someone other than a republican, we shoot -- we could see these plans attempt to be put into action. sam: as we narrow the fields, these plans will be discussed in much greater detail. let's talk about the wealth tax. can you come up with a single example in history where 12 countries implemented a wealth tax and then went from 12 to three? have you ever heard of a country reducing the tax? the answer is wealth taxes do not work. think about bill gates. bill gates lives a good life.

what does he do with his money? he gives it away. what does every billionaire do? there is evidence the wealth tax does not work. there is an underlying issue of wealth inequality and income inequality some of the candidates are trying to address. is there a solution to address that or do we remain down the path we are going and hope the underclass does not --? sam: i have always believed the solution is growing the size of the pie, not readjusting the tax. romaine: is it being distributed in a way where people in the middle and the younger classes are getting bigger slices? the concern is the pie is growing but folks at the top keep getting more and more out of it. sam: that depends on what the definition of growth is good if growth is only financial, correct. them that have the money get more money.

if the growth is growing the economy, growing the options, reducing regulation, creating an environment where there is more opportunity for more people, then by definition -- romaine: when you look at the economic upswing we had in the u.s. when you take a back to 2015 or 2016, you think the gains have been made in the economy and are being distributed in a way when we talk about increasing weekly earnings, the increase in household wealth, do you think it is a reasonable distribution? sam: first you have to define distribution. depending on which side of the fence you are, you define distribution before or after government benefits. i can say to you that the disparity between the rich and the poor is enormous, or i can add in the income tax and all the rest of the goodies, and then the despairs the is nowhere

near at -- the disparity is nowhere near as great as the political candidates suggest. alix: to route this out on an investment angle. for technology, i look at whether elizabeth warren's ideas about technology can be implemented. europe is also cracking down on regulation. facebook and google, launching investigations. would you be not investing intact? -- investing in tech? how does that translate to sam zell? is a hard asset guy. it is not that i do not like technology, and i look at something like uber or lyft and i say maybe it is great, but not for me. alix: sam zell says tech is not his jam. i will stick with that. really appreciate it. always fun to spend an hour with

you. sam zell of equity group investment, and bloombergs romaine bostick. much more coming up on bloomberg daybreak. a market going nowhere. tune into bloomberg radio heard across the u.s. on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: my thesis for the morning is maybe it could be worse? terrible data out of china but germany avoids a recession. growth up .1%. not a lot of movement across any asset classes. offleft schulz of germany of stimulus in germany. that is it for me. jonathan ferro is up next. ♪ everyone uses their phone differently.

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jonathan: coming up, the latest data out of china disappointing. the economy is decelerating. trade talks hitting a series of road bumps weighing on homes for a phase one deal. as treasuries rally, stocks weathering the storm. equities closed all-time highs. with 30 minutes until the opening bell, here's your thursday morning price action. equity futures .2% on the s&p 500. 110 -- 1.10 and weaker against the dollar. yields coming in six basis points on the 10 year to 1.83%. let's begin with the big issue. equity markets holding onto all-time highs. >> a lot of the major lists have receded. >> the biggest risk is straight, that has dissipated. >> we will see if we can deal with that and uncertainty. >> it will