storm a university campus firing tear gas and rubber bullets as the unrest continues. the high court rules the government masked man unconstitutional. saudi arabia sets evaluation target for aramco well below the initial goal after less than four weeks until the election. u.k. political leaders seek to win over business. we are live at the conference. ♪ >> welcome to surveillance.

we have had six weeks of gains free u.s. and european equities. the longest run of gains like that in two years. the s&p 500 hit another record on friday and we look to be on the front foot albeit in a muted fashion today. the seven that cut to day reverse repo rate in china which made the list in particular chinese equities. the 10 year yield dropping last week. we slid down from ed handel we had on november 7 and now back up basis point. what it will take to take us back up to 2%? a crucial few weeks ahead as we've had some positive news on andu.s. china trade talks boris johnson said all conservative candidates will back his brexit deal if he wins the december 12 election. of course his party leading in the polls the moment. coming up we will speak to u.k. labour party leader jeremy corbyn.

don't miss out at 1:00 p.m. u.k. time. we begin with evaluation target for aramco with saudi arabia to add as low as $1.6 trillion per that's well below the much touted $2 trillion. it would allow the saudi oil trying to take over at -- overtake apple as the world's biggest company but might fall short of the record setting ipo. the target could see it below the offering back in 2014. over to the u.k. where it is election season. prime minister boris johnson is trying to win business leaders to his side with tax cuts. they are an olive branch for the disruption caused by brexit. this ahead of the first debate tomorrow. he will take on jeremy corbyn before that we speak with the labour party leader this afternoon. royal family

suffering and public relations disaster. this over enters attempt to explain away his friendship with pedophile financier jeffrey epstein. criticism over why he decided to speak with the bbc, the prince denied sleeping with virginia robert, one of epstein's alleged teenage sex slaves. over to venezuela where they are the biggest protest in months as the opposition seeks to revive the campaign to oust nicolas maduro. , venezuela guaido has been recently quiet as protested other south american nations. many are not doubting -- the world'ss richest person again. gates was helped in part by the pentagon surprise decision to avoid -- award the tech giant a cloud contract. but don't feel too sorry for jeff bezos, he is still worth an

$108 billion. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. nejra: i will withhold my sympathy as you suggest. a hong kong court has ruled a government ban on facemasks is unconstitutional. the decision comes as unrest continues in the city after weekend of violent standoff between police and protesters. police move to clear activists from the university amid dramatic scenes of flames and smoke. the former hong kong democratic chair spoke with stephen engle in the wake of the confrontation. government,kong which is under complete order, they have to respond to the people's demands. if you look at turmoil elsewhere in chile and bolivia, within

days or weeks, they responded. so they have to. we are not asking for revolution or independence. we just want an independent commission of inquiries. joining us now from hong kong is jody schneider. great to have you with us. are we bracing for more chaos? another day after another weekend of violent clashes. this centered at polytechnic they --ty and basically the police have been warning protesters and students to leave, they had been holed up there all weekend. today we seen them come out into the campus area several times warning them to leave saying they could have shots fired if they don't. the police have said this is not a raid, it's just a dispersal operation, but there has been a lot of violence and chaotic clashes there. we haven't seen too much in the

city today. schools remain closed and continue to be canceled. there was a demonstration of lunchtime in the central financial district. it has been centered at polytechnic university and we've seen scenes of police wrestling protesters to the ground so it's been very chaotic. another weekend of those kind of chaotic clashes in hong kong. nejra: of course over the weekend we saw the chinese people's liberation army helping with the cleanup. we learned though that was actually voluntary. tell us about the court ruling on the masked man. one of the potential applications of that? jody: that's very interesting, we learned about that today. the high court in hong kong ruled it was unconstitutional. they said it had been -- it exceeded well beyond what was necessary for the police to be able to do their job and also

said it had remarkable with. this was a blow to the government authorities here and the police would been trying to find ways to try and restore order in hong kong. and this is one tool in their arsenal that now the high court has said is unconstitutional. this was something the carrie lam announced last month as part of emergency measures but had not been used in more than 50 years since the colonial era. jody schneider, thank you so much. earlier today, the people's bank of china trimmed short term policy rate for the first time since october 2015. they cut the rate five basis they warned5% after the chinese economy was facing greater difficulties from a slowing of investment and sluggish industrial production. joining us in london is roger jones, head of equities. great to have you with us.

do you think the latest move, the cuts in the seven day reverse repo rates is just more evidence of the piecemeal approach of china towards stimulus? roger: i think they will take it in a gradual, especially with the actions that have happened before. they don't want to -- i think it will be measured in terms of how the economy is progressing and in terms of how it's holding up. nejra: how concerned you about the domestic picture in china completely separate from its going on in the trade war? roger: there is slowing there. there's probably -- one of the pillars of growth for china going forward has been setting an agenda is consumption growth and more -- and domestic level. something therefore we have to look at and have to consider do need more stimulus to counter this. worrying ingave a

terms of growth and inflation. when the comments that sort of pulled my attention was that they said if things get worse, china's position as one of the few major economies that still has room in conventional monetary policy should be actively maintained. what does that do for your view of chinese equities versus equities elsewhere in the world? >> it's clearly if we did get that stimulus coming in and they are quite right there is more monetary options available in china and probably the rest of the world and i think that targeting of the domestic market will be very interesting. more on the consumer side rather than fixed infrastructure they've done before then i think that could be a very different dynamic within china. i think you can make the domestic chinese equities. certainly interest again considering the low valuations. have seencertainly the protests get worse and at

least the past week we've seen the equity market flounder showing a little bit of resilience. roger: they are extremely cheap against the historic source levels in hong kong, but uncertainty is sky high. it's never been this level of uncertainty. it's difficult from an investor point of view to see how this gets worked out at the moment and the protesting stops and there is a solution found and i think until we get more clarity and until we have a major event, it gets more visibility in hong kong that it's better just to stay clear of it. nejra: roger jones staying with us. top negotiators from the u.s. and china on saturday, beijing can talk -- discussed the talks. this is bloomberg. ♪

♪ nejra: economic finance and politics, this is bloomberg surveillance. let's get the business flash. offers --erox paper the offer by hp was rejected. hp says it's open to a foreign merger but there are fundamental questions to address, this is xerox revenue declines. airbus is in talks with general electric over engines for its jets. it's a blow to rolls-royce is currently the only turbine flame -- plain. a new engine could potentially lower carbon emissions. but both companies are declining to comment on specifics.

over to california. pg&e warning of more blackouts starting wednesday, the bankrupt utility may cut power to about 180,000 customers. that's due to a forecast of dry windy weather. they are designed to present -- prevent power lines from sparking wildfires. the company has faced a backlash from outages leaving customers in the dark for days. that's your bloomberg business flash. nejra: thanks so much. trade and top negotiators in the u.s. and china spoke by phone on saturday with talks of the phase one trade deal describes contract -- constructive. let's focus on what it means for investing. still with roger jones. we hit another record on the -- s&p 500. we saw a six week of gains after the 10 year treasury yield tumbled last week. what are equity markets pricing right now? roger: they are pricing a pretty rosy environment. in terms of a resolution, a

phase one deal. that they can move on from that uncertainty. we clearly seen a lot of stock to this era move quite a lot and in the meantime we've seen fairly disappointing outlooks for the fourth quarter. very much there's been this sort of sense on equity markets. nejra: i was reading some commentary over the weekend. we haven't managed to get back up to 2% and they said to go back above 2% when you see the u.n. strengthen and then you've got morgan stanley on the other hand who said you need a rollback back of the september tariffs to get the 10 year yield back above 2%. what specificities of the equity market need to keep hitting another high after another high? >> we need the rollback and tariffs but i think in terms of the fundamentals against the actual sentiment i think this is all the focus and i think it's a

little bit of a red herring as well. ,n terms of the global economy the china u.s. trade war i think we are seeing in terms of all of this we have to make sure we don't just get focused on this one specific area. there are other troubling areas. nejra: so if we were to get good news, say phase one deal reached by the end of the year or early next year, with that prompt you to want to move money out of the u.s. and other markets elsewhere. roger: clearly the biggest benefactor could be other markets, china itself, europe obviously and a big exposure to asia generally i think that could help. have a situation here where all the good news from the trade deal actually come to fruition gets priced and quickly in the fruition comes, there's some disappointment and that sentiment turns and we get a little bit of a go back and markets. >> you are fairly cautious.

but within the equity space are there any areas you see more mark -- used -- that seem more attractive? roger: we've got some improvement in japan. there is improvement in terms of shareholder friendly measures starting to take place which is getting traction now from japan domestically rather than just external overseas investors and second i think u.k. small-cap has been a massive laggard and if we get more political clarity , it could be interesting. nejra: we will pick up a little bit on the u.k. in a moment. up next, saudi arabia sets the valuation target for aramco's ipo well below. we look at the implication next. this is bloomberg. ♪

seta: saudi arabia has aramco's evaluation well below the crown point's $2 trillion goal. they pared back to size the sale is looks to ensure it successfully lifts next month. --are joined by bloombergs economy reporter. the ipo is turning out to be a lot smaller than initially

anticipated. we were talking about as much is. there was talk of two and a half percent. and what it's going to sell is close to 1.5% so the actual size they are selling is smaller, but also the other issue we are seeing is the ipo was meant to bring fresh capital to saudi arabia to help the country. what it's turning out to be right now is not purely, but in the a local ipo shares are not even being marketed in the u.s. and canada, so international investors get into it. relyny ways that will heavily on retail investors in saudi arabia. >> given that this deal is far from the original plan the crown prince had, what outcome will be

seen as a success by saudi arabia? headlines,rnational we will see it highlighted everywhere that it's a far cry from the initial ipo anticipated back when the crown prince talks about it in 2016. but the saudi's will undoubtedly say this is a milestone in terms of their transparency, in terms of bringing a big company like this into the market, but the issue here is the ,iversification of the economy they were planning on using those proceeds to bring money from abroad from global investors to build up industries in the country and help diversify the economy that so largely dependent on oil and right now it seems a lot of the money will be coming from within the country. great to have you with

us, thank you so much. still with us, roger jones from london and capital. what have you had about the aramco ipo? nejra: -- roger: very limited. in terms of the interest, it's going to be an incredible lack of interest in this area. which i exposed speaks to mainly domestic investors. nejra: what you think is behind that lack of interest? is it concerned with the ipo itself or the outlook on oil? roger: it hasn't helped. stocks are not performed for a long amount of time and it's very difficult longer-term given the impacts u.s. and shale is happening -- is having. and really i suppose some of that inflows of oil moving from opec. nejra: how do you choose to

invest around oil assets? comparing the dividend yield on saudi aramco to what you can pick up, some people have made that comparison but of course there's a question about the pivot away from fossil fuels and peak oil demand. what's your strategy? roger: i think just on that level from the amount of investing, oil is clearly out-of-favor there. you got a lack of demand from that point of view, but the fundamentals are not great. difficult tovery become bullish given all of those trends and also we so recently in terms of the dividends, there are some questions where products should actually hold the dividend rather than increasing it. i think there are definitely issues to be resolved. nejra: we talk about peak oil demand looking at price 30.

in the short term would you be bullish on oil or not? ,oger: it's not just u.s. shale you have brazil coming on stream with significant amounts of oil. african oil is coming on stream as well. clearly we've got a situation reserves oil as well like venezuela are forced to open up their own reserves. nejra: stay with us. sticking with hong kong, updates throughout the show. hong kong police are to stop enforcing the masked man after the height -- mask ban. this is bloomberg. ♪

nejra: chaos in hong kong. police firing tear gas and rubber bullets as the unrest continues. the high court ruling the mask ban is unconstitutional. saudi arabia sets the target for aramco's ipo below the initial goal of $2 trillion in with less than four weeks until the election, u.k. political leaders seek to win over business. this is bloomberg surveillance, i'm a rich a pitch in london. ra chahic in london. >> confirming they were interested in taking over the company and then we got a rival bid from the exchange for 2.8 know sharess 1 -- i are trading at a record high and seeing its biggest move. highestping to its since december 2000 and rallied

last week after it appeared to be interested in buying this diagnosing company while on trial -- friday they said they received multiple interest. they are reviewing all of them. finally, they had been reviewing options in their asia unit but decided retaining that business is the best value, they are still looking at options for the vietnam and indonesia businesses, but for now -- nejra: let's get first word news. >> we begin in hong kong where there is unrest escalating there. police closing the cross harbor tunnel linking hong kong island with kowloon. smoke billowing after many fires on campus.

officials warned police may use live rounds. in hong kong, the high court ban isthe mask unconstitutional. last month you may remember carrie lam and pose the ban and for the first time in more than chief executive invoking emergency powers. explainndrew trying to his friendship with the late pedophile financier jeffrey epstein. criticism mounting over why he decided to speak with the bbc. the prince denied sleeping with virginia robert scum one of epstein's teenage sex slaves. over the venezuela, the biggest protest in months. the opposition seeks to oust nicolas maduro. vendors will have been quiet after demonstrations earlier in the year. doubt juan guaido can

unseat president maduro. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. with less than four weeks until the u.k. heads of the polls, politicians are focusing on winning over business leaders. speak atrs are set to this meeting of the confederation of british industry in london. anna, great to see you again. i'm pleased to say i'm joined here at the cbi conference by the president of the cbi, john allen. thanks for having us at your conference. let me ask you about what business at a high level, what business wants to hear today. a lot of political voices coming to speak. what are the key messages they will watch out for? >> we want to hear whoever is

, that whichever party forms the government will have a strategy tond enable future economic growth which means more jobs, higher wages and politicians can make a huge difference in achieving that. situationbrexit did do you think they want to see the relative certainty of boris johnson steel which of the want to chance for the country to decide again and perhaps choose to remain? is there a view that is expressed to you? i'm trying to get an idea of what the cbi stands for now. the cbi has never had an unqualified view, what we've always wanted to see an outcome

which gave us a really good close trading relationship with our european neighbors. with europe or countries with free trade agreements. have ak it's vital we good frictionless free-trade agreement. if we leave the eu formally at the end of january as it's likely if there's a conservative government, that's not the end of the road. it's the beginning i think of a very long negotiation to ensure we get a long-term relationship and that will be complicated and difficult and business will be working hard with whichever government it is to try and ensure we've got an outcome to that that is good for the economy. >> boris johnson said he won't extend again and that raises the question of another cliff edge inther we go to a no deal december 2020. is that something the cbi is nervous about?

withint can be done 2020, that would be terrific. that may be possible. many people think it would take longer. i think we should set out with the intention of concluding a positive agreement as quickly as possible and by this time next year, it will be clear whether or not that will happen. >> what have businesses been theng to you about the plan labor government has been talking about? week the listlast grew. make them nervous about a creeping nationalization? >> there is a lot of nervousness about a renationalization. industries talked about nationalizing by labor are

already highly regulated. while we spend huge amounts of money when it could be done by regulation. so i think there is general now is also that because that going to deter foreign firms in particular from investing in the u.k. making investment decisions. be?'s the impact going to i think there are a lot of concerns about -- it's probably .he biggest concern there are other elements that are attractive to business. >> we talked about that arent brexit and where that goes. what about concerns or reactions example, itt, for

looks as if we will have that from boris johnson. is that something at this point they want to see? >> the whole question of business rates for example is something that will be very hard. we think maybe something from the prime minister this morning on that. where they'reen substantial reform business rates, it's a very different. word to talkrude about business sort of dismissing their concerns. do you think he's listening very clearly and cares what business thinks of this point? >> absolutely. i think there was a spat. think are nowi quite open. when we were in the final stages

of the new negotiation, there was a clear view on how to resolve the toughest dilemma which was this issue of northern ireland backstop that was adopted hook line and sinker by the government. we've got evidence they are listening. it will certainly listen where we have a cogent argument to do something. you, john allen. later on today we will speak to u.k. labour party leader jeremy corbyn, don't miss that interview. stay with surveillance. plenty coming up including will it be a happy holiday for u.s. store operators. retail results later this hour. this is bloomberg. ♪

nejra: during the previous segment we referenced labor's -- it's nationalize just the bt open reach portion of bt we were referring to. london in november, house prices resist their downward slide. asking rice's -- asking prices fell with listings down 27%. over to california, pg&e warning

of more blackouts. it may cut power to about 180,000 customers due to forecasts of dry and windy weather. the shut offs are designed to prevent powerlines from sparking wildfires but the bankrupt utility company is facing a backlash. outages left some customers and businesses in the dark for days. morgan stanley predict next year american equities and corporate bonds will underperform peers. they also forecast the dollar will get weaker and growth outside the u.s. will pick up. morgan stanley says they undressed -- it doubts the banks can hold off -- pull off the same trick twice. bill gates is the world's richest person again. he is nabbed the top spot. that decision to ride the tech -- award the tech giant a contract helps gates. jeff bezos is still worth $108

billion. that's your bloomberg business flash. let's focus on the u.k.. the pound is climbing as boris johnson said every conservative candidate has now signed a pledge to vote for his brexit deal if elected. the latest opinion polls suggested increasing need for the prime minister's party. johnson's conservatives are now jeremy- at 42% with corbyn's labour party on 30%. still with us, roger jones. you are quite positive on u.k. small-cap equities on the reduction of political risk. is that a tactical position you think will run beyond the election? roger: certainly a relative position. which iset cap portions of the small-cap index. clearly areas of the

u.k. that are still challenging but i think they are challenged to the global economy, not political risk. nejra: is that a trade you would want to make regard -- is there a trade you want to make regardless of the outcome or is it based on the conservative victory? roger: it comes to the probability of what we look at the polls or what the bookmakers are saying in terms of the outcomes of the election, it seems to be the remains were we don't have we have a conservative government -- minority position or we get a majority. i think the big issues are taken off the table. the big issue would be a hard brexit deal and that seems a possibility. even if we get a conservative victory and boris johnson steel passes it doesn't necessarily mean the uncertainty is gone away for business.

we have to negotiate the actual trade deal. what does that mean to you as an equity investor? >> that's true. i just mentioned in that clip a very long time for negotiations were during that time the market will take that view. ands look at the near-term we could see a better outcome. >> also looking u.k. stocks versus deals, i'm wondering how you measure that up at the moment. to short guiltg because they see physical largess regardless of the u.k. after the election. >> that is certainly true, whoever wins there will be more fiscal spending in the u.k. at the expense of bonds. that's helpful for domestic u.k. small-cap stocks but i think in terms of this very large yield

between dividend yields and equities in the u.k.. is your outlook for sterling are you factoring into this? sterling is a crucial dynamic in this. a shock outcome would be in the small the probability of a major -- labor majority. sterling to get a majority, if they do get a majority i could see sterling pushing higher. i think for domestic stocks ofin, the probability sterling appreciating is small. nejra: you added to european equities this year. if we get certainty of a deal and negotiate the trade agreement, with that make it

more still on european equities? quality inverse with quite depletion's -- depreciations to their international peers. --ope is had it's had a pretty good year so far. there's been a lot already done. nejra: roger jones stays with us. plenty coming up including will it be a happy holiday for u.s. store operators? retail results next. this is bloomberg. ♪

nejra: this is bloomberg surveillance. let's talk u.s. retail. u.s. economic growth could be to risk of slowing further in the third quarter as october figures show a weakness in a majority of retail companies. a number of retailers kicking off tuesday with cold home depot and tjx. wednesday we get target and lows and then round out the week on thursday with nordstrom, gap,

and macy's. roger jones is with us. another record for the s&p 500 on friday. is the u.s. equity market being supported by fundamentals or more by phono -- fomo? roger: there has clearly been a money pushing to the markets. a lot of cash on the sidelines, but i think that starting to come in higher. if you look at fundamentals we have a fairly mixed outlook. a lot of hope in terms of a better picture for 2020 than we saw in 2019. the current trajectory is still pretty disappointing. >> so you are underweight for u.s. equity markets of the moment. what would make you want to change that to an overweight again? roger: evaluation is a big part of that. valuations are very high generally speaking. i think in terms of we are seeing a big rotation in their but there is very little

valuation traction in the u.s. for that to change we need earnings to move ahead and for that momentum to come through and really work these valuations down or we need the correction market. nejra: are you expecting earnings to be able to do that? roger: it's pretty asymmetric in terms of that at the moment. we see u.s. equities with these high valuations and fairly lackluster economic environment is going to take a lot for these earnings to accelerate significantly. industrial manufacturing looks more like a stabilization than a rapid recovery. even if we do get a trade deal, i think we will have caution in terms of capital expenditure. nejra: the strength of the u.s. consumer, is that going to be enough to keep the fed on course through 2020 and basically not see any more cuts? roger: the biggest part for the

fed is how the consumer plays out. seenrically what we've when manufacturing and industrial companies struggle, they start to cut labor ultimately and we see some signs of that, but it hasn't cut more than a little bit. as labor markets week and i think there will be further cuts to come. nejra: if the fed does cuts in 2020, how do you expect that market to respond to that? is it concerned about the outlook or positively because there's more liquidity? the danger the fed does get a little bit behind the curve, so ultimately we do consumption starting to come down and a weaker consumer environment. then the markets will be very fearful of that and until we start to see the fed coming back in, there is bound to be a lag and so in that, it could get quite a correction in equity markets.

nejra: basically about the belief in the credibility that's going to give the equity markets a lift. the other thing that is sort of discussed a lot is if we get these resolutions on u.s. china trade, money might start to move out of the u.s. into other parts around the world. which of the unloved equity markets would you prefer in that scenario would you want to go back to the u.s.? roger: if we do get that better global trade environment, the u.s., given its positioning of the market is -- as defensive will move elsewhere. japan looks like the most interesting market. markets ishe export a very large part of it. great toeat -- nejra: have you with us this hour. roger jones. tom keene joins me out of new

york, we will talk about the u.k., including our conversation with jeremy corbyn. we are keeping an eye on hong kong as protesters calling universityhong kong which is surrounded by police vowing to arrest hundreds of demonstrators who have taken over. this is bloomberg. ♪ here, it all starts with a simple...

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corbin will speak. our anna edwards in conversation with mr. corbin. nears 11election months from now. the iowa caucus is february 3. capitulation nears as stocks bid, the bears must adjust. in london, nejra cehic. thrilled you are with us. hong kong front and center. we are going to go there in a moment. the velocity of change over the weekend was extraordinary. it has been a fascinating couple of weeks. been onthe focus has the stimulus from china in terms of lowering that seven-day reverse repo rate. tom: some of the banks in china

a little fragile. here is your first word news. >> we begin in hong kong. in aeds of protesters university after police and protesters battled over the weekend. police are warning live ammunition could be used. firestrators have returned , , throwing gasoline bombs and throwing bricks. china's key negotiator speaking by phone with the u.s. treasury secretary trade representative robert lighthizer. six months ago, you may remember the to sides were close to an agreement. to get the aramco deal done, saudi arabia swallowing its pride. the initial bid price was set s's preferred

price. minister boris johnson will offer business tax cuts as an olive branch for the destruction caused by brexit. johnson'sing conservatives well ahead of labor. 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. tom: thank you so much. that's get right to it. the interesting market, continued risk on. futures up five. dow futures up 65. on to the next screen with the vix up. closed extraordinary.

safe haven drifts away with gold 1459 the ounce. equities give up some of the gains. what takes us above 2%? for morgan stanley, it is a rollback of the september tariffs. slipping inyields china after the pboc cut the repo. boris johnson said every conservative candidate has pledged to vote for his brexit deal if he wins in november. how far that is from the developed world 10-year yield. is important to note when difficult things unravel, they have a persistency. that is one of the great rules of wall street.

unraveling.e this is the price of a week company bond. you are here at heart. down you go to 15% in just the last four or five days. work six-year piece priced out that a stunning 15%. basically as the yuen weakens against the dollar, you have had the 10-year fall. thank you so much. if you feel hong kong has become abler, week after week, weekend after weekend protest. together into a

crescendo this weekend. us hongneider brings kong expertise. yesterdayifferent from every other sunday? we saw this at the university at polytechnic university. not only very violent, but police were giving all kinds of threats to students. it exploded as you say. so much of a we have seen in hong kong over the past five months we saw on one university campus yesterday and continues today. police are still ordering them to stop, saying they could be arrested, could be fired upon. there have already been hundreds of arrests, so many arrests that we are not even sure which police stations they are going to. arrests, one 154

count from the associated press. the university of hong kong one of thetech, wha differences is the distance across the harbor and the other is the government. is there a difference? it shows that they are spreading. we are seeing this continuing to spread and there being different flashpoints. last week what was so stunning is that this came to the heart of the financial district where we sought lunchtime protests with office workers being caught in this. this week we saw a university students unable to leave the campus, really becoming a battleground between police and protesters. it seems almost like each

weekend we see something different. we are in another weekday, and we are still seeing this. public schools were closed yesterday and will be closed tomorrow. just look ahead for us a little bit more and tell us about the court ruling that the mask ban is unconstitutional. what should we take a week? we got that news today. ban thathe masked carrie lam announced. the court announced it would be exceeded what law enforcement would need to enforce the law. said it was more excessive than it needed to be. the implication for this for the hong kong government is that

this is one less tool in their arsenal. they have looked at this as some a way to try to quell of the protests. jodi schneider, thank you for joining us. joining us is andrew sheet at .organ stanley welcome to the show. great to have you with us. andrew, let me get your first take in terms of what we learned from the pboc today. does that confirm for you that the pboc is going to continue with piecemeal stimulus measures? >> that is what we see. we see the pboc doing defensive stabilizing measures for growth, but nothing close to what was on 2016. nejra: if we also look to the unrest in hong kong, we are

seeing a little resilience in the equity markets today. worriessomething that you about risk assets? >> it is a serious thing to consider. i think what investors will look to next is will this have any impact on u.s. politics and how u.s. congress is seeing some of these events? i think that would be a complication to the current trade negotiations. i think the market is expecting those negotiations to go well. we have had six straight weeks of equity gains. those have been based on almost constant headlines that the trade negotiations have been making progress. unresolvedll an trade deal on what should be the easy part of trade negotiations. a further deterioration in any situation would make that more

difficult. nejra: michelle, what is your take in terms of china's response to these two terms we slowdown andg, the the geopolitical risk in hong kong? risk in hongitical kong has been contained on the mainland. on the mainland, these are seen as hoodlums and hooligans. beijing is extremely worried and keeping a watchful eye on hong kong, but the risk of contagion is relatively limited. the bigger concern is the economy and the state of the u.s.-china trade negotiations. even if we get a phase when deal, it does not solve all of the issues. tom: i think you go to the heart of the matter. any belief, desire, or understanding that the response to these protests is linked to the trade discussions, are they?

>> the u.s. senate could pass a bill that could worsen the situation on the broader strategic bilateral relationship. both sides want to reach a deal on the trade talks. that would help investor sentiment. the underlying tensions between the u.s. and china are here to remain. issues like hong kong, human rights, technology, currency, a host of issues that will continue to come up between the countries. tom: it is interesting to say the least. what it comes down to is this distinction in hong kong that gets you out another week and another weekend. what activity would you look forward to this week in hong kong? >> it looks like it is a constant escalation. it is hard to see how we get some kind of calling of the

situation. we will probably see more troops on the ground, but probably not the chinese army coming in. we have seen the police officers and hong kong police trying to calm things down. it is kind of like whack-a-mole. you try to get it in one place, and it pops up in the university or financial district. these are extraordinary issues. tom: let's ask the question that drives us forward into the next hour. morgan stanley has finally pushed away from a recession call for 2020. what kind of growth will be eneing if we don't have -- se if we don't have a recession call for morgan stanley? >> i still think the recovery we are looking at is going to be modest by historical standards. the market is expecting for growth to improve through 2020,

4 p.m. i -- for pmi's to inflect. thisis very different for cycle is markets are entering that growth inflection much higher, much more expensive, much more relaxed than they usually do. that limits the gains. that makes it a much less robust market recovery. we think it is enough to avoid recession but not enough to drive large gains. nejra: you stay with us. coming up from the confederation of british energy conference in london, prime minister boris johnson will address business leaders, talking about tax cuts. later, labour party jeremy corbyn will speak. we will sit down with jeremy corbyn at 1:00 p.m. u.k. time. this is bloomberg. ♪ ♪

nejra: i am nejra cehic in london with tom keene in new york. china cut's bank of the repo rate five basis points to 2.5%. had the pbocalso talking about growth and inflation over the weekend and painting a concerning picture. how concerned are you about the domestic side of china's economy? >> the economy has been slowing. it was slowing before the trade war and regardless of the trade war, we have seen the government take a cautious approach on

inflation. they need more liquidity in the banks. we have seen a lot of the money that has gone into traditional government has gone to repay debt rather than to create real growth in the economy. they are pulling out additional levers as they need to make sure growth does not fall off a cliff. concerns are as much about rebalancing the economic structure as it is about surging growth. nejra: at the top of the show, i showed the connection between dollar you and and the treasury dollar-yuen and the 10 year treasury yields. >> i don't think there is a correlation versus causation issue. i would agree with that.

i think the scenario where growth is much better and trade goes much better, that it is actually the tariffs being rolled back, that is probably a scenario where 10-year yields are much higher. i think that is the way that correlation will behave. we will continue on the allocation and equity view of morgan stanley. thank you for joining us this morning. it is another news item on a very difficult transactional path. that would be saudi aramco. the visibility to new york not going to happen. the visibility of their roadshow to london will not happen. up tolways comes institutional enthusiasm. earlier bloomberg reporting on doubling of leverage units for the small retail investor in saudi arabia. this is a changed aramco deal.

next, saudi arabia and oil. this is bloomberg. ♪ is bloomberg. ♪

>> you are watching bloomberg surveillance. the board of hp rejecting a takeover offer from xerox. it raised questions about xerox's prospects in the printing industry.

chinese customers are discovering their appetite for iphones. bloomberg finding during september and october, iphones increased by 6% in china. that suggests the iphone 11 is selling more strongly than its predecessor. begin in the gilt conversation on the aramco transaction with julian lee. looking at the financial side of the oil industry, you know that what you do in an ipo, and i want to make clear morgan stanley is involved in this transaction. you go ratios. you go compare, baloney. it is about the money raised. aramco will be raising at an alibaba level. how did the greatest oil company

in the world get to a cash raise the equivalent to an internet company in china? they have been unable to attract foreign investment in pointtatement to the where they have canceled the proposed roadshows across north america, canceled japan, and london as well. shrunko has shrunk and as the international appetite for a stake in saudi aramco has just not been there. important, and i don't want to play banker 101, but i believe what you do is lower price or reduce shares and -- $1.6 from that 1.6 trillion number. be saved? needs to >> they had a real problem from

the start when crown prince mbs said saudi aramco is worth $2 trillion. everything subsequently has been looked at through that lens. there has been this constant attempt to save face and to pump up the value of the company and the value of the shares being offered. we have saudi banks allowed to load twice as much to potential investors as they are prepared to state themselves. that is double what would normally be allowed in saudi arabia. have the touting of business among sovereign wealth funds and potential cornerstone investors in asia and perhaps russia. we have the rich families in saudi arabia being encouraged to invest heavily in this. it is a problem. given that this looks very

different from the original plan, what will look like success for saudi arabia? >> i think success will be getting somewhere near the 1.7 rather than the 1.6. i think it is going to be attracting at least one if not too big investors from asia. it is going to be encouraging domestic investors not only to buy into this but to hold onto their stocks and hopefully create momentum going forward so that they can then list another branch of shares. thank you very much. coming up on bloomberg the open, brian guillory at 9:30 a.m. new york, 2:30 p.m. london. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." let's get first word news.

>> will begin in hong kong, where police have arrested hundreds of demonstrators who have taken over a university campus. fired rubber bullets at the demonstrators. the demonstrators have thrown bricks. overkill iran, security forces signaling there is little tolerance for unrest. they have arrested hundreds of people protesting, some setting fire to bank branches and stores as prices were erased by as much as three times. california and fresno, police saying gunman sneaked into a backyard and opened fire on people watching a football game. at least four people were killed. the victims were described as asian men. police say there is no

indication of the victims knew the attackers. michael bloomberg has apologized for the controversial stopping first campaign while he was in office in new york city. bloomberg told a church congregation he got it wrong, and he is sorry. he is considering a run for the democratic presidential nomination. he is the presence of bloomberg lp, the parent company of bloomberg news. 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. tom: tom: thank you so much. we have and are sheets from morgan stanley with us in london. he is the perfect guest to speak to you today with his synthesis of the morgan stanley view on the capitulation of morgan stanley on a great bear market. give us color to this. for mike wilson and your u.s. equity team, what was the distinction that changed the

morgan stanley call? say our call is changing in some ways and not in others are economic outlook has gotten better. we think growth will improve for the first quarter of 2020. we think that should drive modest single-digit returns for equity markets outside the u.s. we think equities will be in underperformer next year because the earning trends will be weaker and evaluations are significantly stretched. we think it is a market that will have significant uncertainty next year. is important to here is the overwhelming of any regression function with one coefficient. is actress -- that central-bank policy lower for longer. does that simply mean equities higher for longer? >> not necessarily.

i think equities need a fundamental driver and growth. the equity rally powered by multiple expansion, which has been the story of this year, all of the equity appreciation globally has been multiple expansion. there has been no earnings growth. there has been earnings decline across major equity markets. that expansion next year is significantly more difficult. you will have better growth, but policy will be on hold. there is no incremental policy easing coming outside of a recession. that is a more difficult backdrop in the u.s. where we think growth will be stable, but it will not be getting better. outside the u.s., growth will improve more on the margin. that could excite investors. nejra: does that include europe? europe has followed fairly , so if youthe u.s. see the u.s. underperforming, is that against europe or emerging

markets? the u.s.nk underperforms all the major equity markets. we think it underperforms most against europe and japan. underperformed for so long, but over the last 12 months, european equities and u.s. equities are up the same amount. europe is often up more. we think europe is the one market where it is trading well below average in terms of its multiple. we think pmi will likely inflect. we think it will be a better performing market risk-adjusted. you also think that is going to happen in credit as well. how does sovereign debt fit into that picture? we think it remains a difficult environment in terms of worker credit. it is not been particularly

good. if we are talking about a later cycle acceleration in the u.s., even thinking back to 1999, that was not a great environment for credit. the credit investor is usually not in the best place late in the cycle. for sovereign debt, we think emerging market sovereign debt can do well. we think u.s. sovereign debt, those treasuries remain range bound over the next year. tom: the fact is we are in a ripping bull market. you mention earnings, you walk through the slower gdp, and i am going back to it is the central bank massively pushing against it. how does the fed adapt to this? 28,000 dow, 3100 xps? that is great, but i am going to say bubble. >> there are two important

things to think about with the fed. our interpretation of the fed's policy is that there will be no further cuts without a significant deceleration in growth. i think that puts the market in a more challenging place because i think that means in the baseline there are no further cuts, and if there are further cuts, we are looking at a recessionary environment. the more open question is where does the fed stand on financial stability? does the fed see any problem with core cpi at 2.3% with the s&p at 3100, with the multiple at a cycle high, with volatility low, continuing to keep policy easy? so far there has been no push back against that. let's do some brown university math and go back to

fifth grade, which is the idea that the rate is where it is, flip the reciprocal, and you have the multiple. i have two companies trading at a 30 multiple. that seems a little bit odd. what is the catalyst to get us back to that short of recession? back toou get ratios something that seems historically normative? the first point i would make, and the most important point is that as much as we hear repeated over and over that low rates high market multiple, that is not true. over the last 20 or 30 or 40 years, it is not always meant a high multiple. i think the first vulnerability of that is it relies on the idea of the rate market being wrong and growth not really being as bad as the rate market is expecting.

that is something we will need to watch. if we look at the u.s. market, we see this somewhat differently. we think u.s. growth will be ok. we think a lot of that is in the price and that the expectations for growth in the u.s. are still too high in the market will get more excited about a better acceleration story outside the u.s.. nejra: you said the base case is that the fed is on cost next year. cuts that ishe fed a sign of a recession signal. cut or will it rally on the fact of more lucrative the? many ways we could be wrong at year, that could be one. i think the difficulty we have is that you are already at no earnings growth for the s&p over the last 12 months, cycle high multiple, and a situation where

pmi's are below 50. i think you are getting very close to recessionary threshold, and in our view the market will have a hard time assigning a higher multiple for that where current volatility and valuations are. andrew she's staying with us. down, michael mckee sits with eric rosenfeld. this is bloomberg. ♪ is bloomberg. ♪

>> music around the world. export thean, you music of jason donovan to north korea. under this government, we have an economy that has grown for the last nine years, 20% bigger than it was in 2010. last week it was announced that the rate of unemployment has fallen to the lowest level since 1974. and yet there is something very frustrating about this recitation of triumphs because it is only half the story of an economy that is still not achieving what it could. supercar ofla one the kind of which this country excels but is only firing on half of its cylinders with so

much more natural energy waiting to be unleashed. the country is being held back by politics. that for thent last three and a half years has simply failed to discharge its basic promise to honor the mandate of the people and deliver brexit. that is why we must have this election now. i don't want election in december. nobody does. we have no choice. we must get brexit done. we have to clear this parliamentary blockage in this aretion because we democrats. there are millions of people who want to get brexit done because they voted leave, and they movede the eu has

substantially away from what they voted for in 1975. there are people who may have voted remain, including distinguished luminaries of the cbi, but just want to respect the results of the referendum, and after three and a half years, they think, we think, i think it is time for the paralysis to end. we have to get brexit done because it is the best thing for our national mood and the best thing to take our country forward. it is the best thing for the economy because the worst thing now is the continuing economic uncertainty, people waiting to take on new staff. nejra: boris johnson speaking at the confederation of business interest in london. anna, you have been speaking to a number of people this morning. what has british

business had to say about the prospect of certainty boris johnson has been portraying? >> british business trying to weigh up the options, hearing from the conservative party, jeremy corbyn, and also the liberal democrats later this afternoon. lots of politics at this event this year. we have been trying to assess what british business wants. do they want the relative ortainty of a brexit deal with that the potential or on theof brexit other hand do you want jeremy corbyn? with that you get another chance to vote on brexit and possibly to remain, but you get his radical renationalization agenda. i think business is finding it difficult to choose between some of the options on the table.

they do seem alarmed by some of the labour party policy. tom: to move forward to your amateur,terview, as an when i look at the polls, it tells me the liberal democrat votes are important. can conservatives pull the liberal democrats away from their natural inclination to go to labor? >> i think with the tories are focusing on is maintaining their own seats. that is becoming easier with the brexit party deciding not to compete with many of them. they are trying to get those leave seats in the north of england away from the labour party. they are going to be trying to win those over. you are right that the liberal democrats could play a part. if boris johnson fails to form any government, if he were to be

the biggest party, it would fall to the opposition labor party. they would have to reach around the house to try to form the some kind of coalition or loose supply arrangement. that is where the liberal democrats are most likely to play their part and why anything other than a tory majority looks as if we could get a second referendum on brexit. the polls don't suggest we get anything other than boris johnson being the leader of the biggest party at this point. it is difficult to get to that second referendum if you look at the polling at the moment. edwards in london, thank you so much. answer sheets still with us. giltre starting to short on the prospect of more fiscal spending in the u.k. regardless of brexit outcome. yieldslso think u.k. will go higher because there are a variety of outcomes to the

current upcoming election that could lead to more fiscal stimulus, somewhat more .ertainty in either direction those yields are still very low. the curve is very flat. the kerry is quite poor. another expression of that is to own u.s. treasuries. good riskhat has reward of favoring the u.s. over the u.k.. nejra: interesting. later, we will speak to jeremy corbyn. don't miss that interview at 1:00 p.m. u.k. time. labor talking about open week unithe of bt. this is bloomberg. ♪ >> as for his position on the

eu, it is positively mind-boggling. he wants to negotiate a new deal, spend another three-month extension. month extension.

tom: "bloomberg surveillance." good morning, everyone. with us andrew sheets of morgan stanley. we earlier spoke about the equity changes at morgan stanley over the weekend. now let us speak of fixed income. glc equivalent. i am up 20%, 25%. can we do it again next year, or is 2020 the year of clipping coupons? >> i think it is very much the year of living coupons. that was one of the ironies of the last 12 months. it has been a good market for equities, but it has been even better for fixed income. cautious investors did just as well if not better. we are looking at a more range bound environment. credit spreads are tight. the modest rise we expect in

growth should make it tougher for yields to grow further. we have treasuries going sideways. in terms of the best opportunity, we think parts of the securitized market. emerging market fixed income is another market we like quite a bit. we are apostate on emerging markets foreign-exchange. you have the fed and the ecb on hold and valuations look more reasonable. is china an area that interests you because yes we saw incremental easing from the pboc liquidity injection, but a comment over the weekend stuck with me. they want to maintain the position where they are one of the few central banks in the world with conventional policy tools in their toolkit. how does that translate? >> i think that is important.

they are trying to aim for more conventional policy. a key part of their strategy is to make markets attractive for foreign capital. this is part of the broader trade discussion. as china moves closer to a balanced overall discussion, they want to be a more attractive market for foreign investment flows. it helps to have more stable, more conventional policy. i think that is important and something that keeps chinese bond yields more contained. where is your preference globally? >> we are quite positive on the russian ruble. we have gains in the brazilian reality. brazil looks quite early cycle. that is a market we see earnings growth next year around 15%.

that could be another story that in the context of a relatively sluggish global recovery. tom: from morgan stanley, and sheets, across asset strategist. monitorontinuing to hong kong. challenging, is particularly at their academic universities. yesterday, the university of hong kong over the weekend, what is called polytechnic university across victoria harbour, and the news flow continuing. heard from authorities. stay with us. this is bloomberg. ♪ this is bloomberg. ♪

tom: this morning, the dow,

28,000, the presumed single digit turn is up 20%. lower for longer rates. lockerger and readies -- -- longer equities. democrats as well. and quite simply, what can or could be next for hong kong? this is "bloomberg surveillance from new york nejra cehic in your francine lacqua. we heard from prime minister jensen, and i believe we hear from esther corbin, and then anna edwards that from esther corbin. then anna edwards will hear from the labor leader. how is the labor leader doing? nejra: certainly caused a lot of waves in the industry over the what is interesting is there are some in the market, bluebay and eco-for example, who are short on deals right now because of a fiscal largess

coming regardless of who comes to power. tom: this may get lost in translation, but in the united it's, we say if i am elect it, free beer. news on afirst word monday with viviana hurtado? viviana: china seppi key negotiator speaking by phone with the u.s. injury secretary steven mnuchin and trade representative robert lighthizer. beijing says they had can trucked of can's -- discussions about core concerns. six months ago, the two sides were close to an agreement than l apart. because the aramco -- saudi arabia following the target said well below. s paring back the size of the sale. invest,mand from local the saudi central bank will boost lending rules.

today, prime minister boris johnson will offer business past disruption caused by brexit. he knows leaders want to stay in the european union. show boris johnson conservatives well ahead of eber. -- of labor. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries,i am viviana hurtado. this is bloomberg. this is bloomberg. tom: thank you so much. equities, bonds, currencies, commodities. 5, dow futures up 16. a risk-on feel this morning. euro strength, onto the next screen with a stunning statistic on a 3200 pass spx, down closing, 2800 friday. gold, 1458, the ounce. nejra: looking a little bit

lucrative on the european session today. the 10 year backs up, 11 basis points last year -- last week. it has to be a rollback of the some number tariffs. the 10 year yield in china sliding after the pboc cut their seven-day. the pound high for after boris johnson every conservative candidate will back his brexit deal if he wins the u.k. election on december 12. tom: that changes year end market tone this year on -- this week on monday. that means trends continue. let's look at the trend right now. this is the company chart of their bond, priced down. this is not the yield of $.15, this is the price i grading from par, 100, -- migrating from par, 100. this is a trend and it is a challenging trend to say the least. nejra? nejra: we could be unity --

looking at a challenging view weeks. in terms of what could ride the 10 year yield, some are saying look at a brisk in china as well. they look at the correlation between the dollar, -- the u.n. would have strength 6.93 for the 10-year yield to break 2% to the upside, tom. let's get back to hong kong because protesters, a 10 minute walk from polytechnic university. there is unrest that continues in the city after a weekend of violent standoff between police and protesters. police made dramatic scenes of flames and smoke. we now join karen lee. what is interesting is amid the unrest continuing today, we have seen resilient in the home angst market, and investors are trying put a reason that. lading it be because worst of the unrest may soon be over as

the police step up arrests. could that happen? karen: today it seemed to kick off again. officials are now warning the public to steer clear of the university. it has called on hong kong poly technical, the security chief of the city, to surrender in a peaceful manner. and the city seven number two official saying the government is determined to end the violence, remaining a top priority. we are waiting to see how the standoff ends, and that could have an impact on what we see tomorrow, not just the markets have the economy but for the city as a whole. we: the city as a whole, stagger into monday and tuesday morning as well. what would you make of the chinese soldiers that were shown this weekend picking up debris?

what was the symbolism of that moment? people, the lot of question for the large part of this summer, heading into six months now, has been, is china going to take a more direct role and send the pla into china to contain the violence? they were helping clean up. some people, the images were jarring, but at the same time, the pla is here, they have a ,arrison in hong kong reportedly 6000 of them here, so this imagery of the pla coming over the border, it is not necessarily how any of that would play out? daniel on his with us, chief of u.s. economist at bnp paribas. and martin schenker joins us.

marty, let's stay on hong kong here. there is nothing going on in washington. havei look at hong kong, i to think of a risk months as secretary pompeo, the response of the united dates government to this. give us some nuance on the challenge is the secretary of state has when he messages on long. marty: they have to be extremely careful. there is no more sensitive issue for the chinese than the status of hong kong and the whole issue of foreign inter-ahrens. the chinese government has made allusions to the fact that there may be foreigners involved in stirring unrest there the last thing the trump administration wants do is upset the dynamic of trade talks with conflating it with hong kong. just withoute it reporting in beijing that the chinese are conflating trade and hong kong? marty: there is no real sense of think it that issue but it certainly could turn into a link

issue -- into a link issue if -- into a linked issue. congress is very much in favor of expressing support in various ways, and that could make it also uncomfortable for the trump administration. nejra: the list of demands from protesters has urgently changed and evolved since the protest again five months ago. with that in mind, how do you see a revolution to this issue between authorities and the protesters? marty: if i had an idea of how this gets resolved i would submit myself to the nobel peace prize. that is the real difficulty, is finding a way out of here, because they protesters do not have a singular leadership struck your, so who is it that the chinese need to negotiate with or placate?

it seems to change every day, and that really make it very difficult to see a way out of this, which is why it is so concerning. let me bring you in here. how would you see in esther's seeing a way through the -- in yesterday's seeing a way through this? dark go that is a great question. i feel many investors are aware of the heightened sense of -- uncertainties coming from global policy you see this in trade policy and you also see this in geopolitical uncertain take, and local unrest. people.the voice of the i think a lot of investors are hopeful that policymakers will be able to put a handle on this. and that the community will provide support.

are bigink there questions about whether this needs to be a new normal and what this means for local growth. tom: you have a story on prince in an harvard and then your work at the state department as a chief economist. explain what a chief economist at the state department says to the secretary of state as he considers hong kong. daniel: their role is fairly new. tom: you were making it up as you go? daniel: something like that. it was created on the recognition in the 21st century economic and financial issues are inextricably intertwined. tom: i would suggest that secretary clinton really had leadership on this. she and dances that she had answers with ambassador format in the least. daniel: you see how hong kong, while it traditionally serves as a gateway into the greater china

economy and was a real of theuse, as the rest chinese economy sort of caught up and do financial centers were developed, now we are at this pivotal moment where china needs to consider the role of that -- the role that hong kong plays. tom: chief economist for b&b perry bought -- dnp perry about. marty schenker, thank you for joining us as well. boris johnson is speaking to conservatives right now, putting or protective on -- he will not cut the orbit tax rate as well i would also point out this morning, anna edwards, in conversation with mr. orbit, representing -- with mr. corbin, representing labor. this is bloomberg. "bloomberg surveillance."

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president did is so much worse than even what richard nixon did. at complaint, richard nixon cared about the country -- at some point, richard nixon cared about the country enough to realize this could not intend you. i will make sure that he does not intimidate the so blower. the president need to come before the -- intimidate the whistle lower. in president could do it writing. he has every opportunity to present his case. tom: speaker pelosi with margaret rendon, "face the nation." face thebrennan and nation, one of the jewels of bloomberg radio.

a hugely popular, and we thank cbs for that. daniel on his with us, from the ahn is with us on pmb perry about. and artie shanker. two, is everyone playing their cards, or does someone have some momentum into the week? marty: i think last week kind of find the issues on this impeachment, with both sides doubling down on the democrats that this is an impeachable act of bribing the ukrainian president to get hurt on joe biden. with the republicans saying now that this is not an impeachable thing, we will get some fromhand perspective gordon sondland, the e.u. ambassador, who will testify

wednesday. tom: that is important because -- he became an ambassador, because that is what happens. he has already had to retrace and retract them comment. -- retract some comments. is he already -- is he with the team? marty: it is interesting, tom, just where gordon sondland is going to wind up on the chart or -- of pro-or anti-trump. it could be that the republicans on the committee try to cast him as an inconsistent witness, basically cutting him loose to fend for himself. i think wednesday you will see some of that. nejra: mardy, nobody is more central right now to this than gordon sondland, also, as you pointed out, unprepared bull. unpredictable.--

what are the republicans going to press upon him? marty: they will press upon him what the republicans knew and when they knew it. that lee briefing people in the white house about the attempt to get an investigation going against joe biden, which under kit -- which undercuts the notion that this was a rogue operation unconnected to the white house. you will see some pressure on him to kind of tell the committee and the nation just how connected donald trump was to this effort. wrappedty, can we get up by year end? november 18 seems to be almost the a possible. my authoritative guess is that it will not get it done by january. they will want to get it done by the iowa caucuses in february.

look for it to get tied up in january and then moved to the senate. nejra: marty schenker, thank you so much. we will be back with daniel ahn from bnp paribas. set up impeachment inquiry resumes, which we have been discussing. 's peachald trump maneuver he resumes, which we have been discussing. kicking offd thursday, bloomberg's new economy in beijing. we will talk with hank paulson and jack ma. this is bloomberg. ♪

watchingyou are bloomberg surveillance. the board of hp unanimously rejecting the takeover from xerox. the company says the did is too low. -- the bid is too low. hp says it is open to a foreign merger, but any to answer questions such as declining revenue. ceo jim hackett telling bloomberg the automaker needs to see if the issue of tariffs gets settled. he said geithner would be a

market for the mustang. the famed muscle car is being reinvented as a battery-powered crossover. that is the bloomberg is this flash. tom: thanks so much. at the year end, we think of the great once we have lost their is no greater one then artan feldstein of -- then than martin feldstein. took a phd under professor feldstein under -- at harvard. do you have an attachment with this art? it hasicit to gdp, worsened. i think that is a phd phrase. year we are down. are we constrained in our fiscal space in the united states, or can we actually use the fiscal tool to support economic growth? daniel: i don't think we are constrained at the moment.

member that we saw gdp levels rise higher than 200%, but it also occurred in will or two. we have definitely -- in world war two. we definitely have fiscal space, but what is concerning is that we are running these high facet in peacetime. i think the real question should be, do we want to preserve the fiscal space that we need for real emergencies, or are we going to fritter it away on trying to power through the general economic vehicle. the idea of paul tsongas, with a responsible this will message, where is it in the republican party today? marty: it has completely disappeared, and it has also disappeared in the democratic already. there is virtually nobody in the race right now who is talking about the need for fiscal know,ce, and that is, you

some people can argue that deficit do not matter, but they do not until they do. that time will come. if these issues are not fundamentally addressed, and nobody is talk about them. dan, why that point, have than the markets not woken up the potential for more easy fiscal policy? daniel: i think they are waking up to the potential, but there is a gap between potential fiscal day millis and actual fiscal stimulus. certainly in this country, we are seeing obviously the 2020 election coming up, and there are very few pundit that see an actual unified government temer's or republicans sweeping both houses of -- unified government with either the democrats or the republicans

sweeping both houses of congress. schenker, have a sporting day in washington. much more to talk about. we are monitoring hong kong as well. also, we will debate forward to wednesday, live coverage and analysis, the fifth democratic debate in atlanta. this is bloomberg. ♪

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our anna edwards speaking with mr. corbyn of labor. right now in hong kong, this is monday evening. i will mark this, seven: 30 pm, plus or minus an hour. what do i know? there it is. 7:29 p.m. this is after a fractious weekend. the distinction is the universities, isn't it? nejra: absolutely. it has been five months of protests now, and the past week in particular has taken some turns we have not seen before. the hong kong stock index is being resilient today. perhaps more of the pacesetting in and stemming the unrest, but also chinese funds coming in potentially propping up the market. tom: we will continue coverage throughout the day, but right now, within the city of new york, here is viviana hurtado.

viviana hundreds of people have been arrested protesting the jump in fuel prices. gas prices were raised last week by as much as three times, with the economy reeling under u.s. sanctions. at the central valley city of fresno, gunmen sneaked into a backyard and opened fire on people watching a football game. at least four people were killed, six were hurt. the victims are described as asian men. there is no indication the victims knew the attackers. off a trump is backing vaping band. it could lead to job losses and hurt his election chances. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over i am vivianas, hurtado. this is bloomberg.

retaillet's talk now. there could be a risk of slower in retailweakness categories is shown in october. tuesday kicking off with kohl's, home depot, and ths. aramco comes out thursday. , daniel ahn is still with us. people look at the strength of the u.s. think sumer -- u.s. consumer. are we in a position where the reliance on the reliance of the economy on the consumer should start to worry us? itiel: i think you put exactly right. the u.s. economy is standing on one leg right now, and that is the u.s. consumer. economy,ts of the whether it is visit -- business investment, those are looking much weaker. number past retail sales

was a critical number, and it is theerning that despite headline number, in all of this, with key areas of description, the consumers are looking like it may be starting to turn over? nejra: dan, you have a fairly onnload -- positive outlook the economy, facing significant downside risk. is that an outlook on the premise that the u.s.-china trade war does not reach a phase one deal? daniel: know, we actually do see that a phase one deal goes through, but what we do feel is that the reason why a phase one deal is a likely scenario is that all of the hard stuff has been kicked off to phase 2. we are concerned about the direction of phase 2 talks, and once investors wake up to the fact that trey's policy

uncertainties -- trade policy uncertainty is not over, that would way uncertainty -- on uncertainty again. tom: here is a chart which is very distorted, but it shows the gdp.on of the change in this is the atlanta gdp now forecast. i will give credit to -- i can't remember who, had the listing of the fourth quarter gdp calls this weekend, and they are all like pn -- they are all like bnp paribas like. on the log you see the rate of change of this q4 decline, is a big deal. how is the rate of change that sudden mattering versus the more gradual rate of change to a 1% statistic? daniel: that is a great question, tom. we are working on our own version. tom: let's break some news here. nobody from bnp paribas is listening. break some news here.

models are own suggesting that this fourth quarter is looking pretty weak, at around 1%. tom: what is the significance of the second derivative of the economic slowdown? does the president even matter? daniel: it means the recent data flow been somewhat concerning, with continued weakness in manufacturing and business investment, and now in retail sales and consumers as well. so this quarter is turning out, looking pretty weak, and everyone should be asking the derivative going to turn the other way and are we going to get upside prices again, or is this performing a bit of a trend, and is the weakness going to spill over beyond one quarter and into next year? nejra: will the fed respond to that with a midcycle adjustment, or a rate cutting cycle?

daniel: we actually are expecting another round of cuts into next year, but we will see sort of what the minutes will say later this week. at the moment, it looks like the fed is sort of banking or hoping on the economy powering through and the consumer powering through after one week -- after one weak quarter, or whether it continues to show weakness. the slowdown on consumption or is it a complete dearth of business investment? daniel: it is all of the above, but it is really the consumer. we will see if this stuff may bottom this quarter. it is the consumer that while the remains are can -- are resilient, it does slow down a bit. tom: a real source of contention here among the guests of bloomberg surveillance of what

they see six months out from the american economy. coming up later today, michael mckee. this is an important interview. eric rosengren is with us, a sophisticated and changeable view from boston. eric rosengren on the path of the fed. this is bloomberg. ♪

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as employers set aside -- as well as access dividends in our plan. it needswith you that reform. nejra: jeremy corbyn speaking at the british industry conference in london. joining us in that congress is anna edwards, who has been covering it all morning. great to have you with us. we heard from boris johnson earlier and we are hearing from jeremy corbyn right now. the sort of choice for british business leaders -- brexit or corbyn -- is that the kind of choice you have been getting from the people you have speaking -- been speaking to? anna: it is a lot that the people will be wrestling with. that this was the start of the brexit process, certainly not the end. you maybe get that, but at the

same time, you get the uncertainty of a no deal brexit, which has not come as we say in the brexit world, been taken off the table. it could still happen at the end of december next year. on the other hand, with the labour party, if you want to remain in the e.u. in the first place, you might like the idea of another referendum. another you might not like the uncertainty another referendum would create. field, it would seem, for the business community. nejra: in terms of what both sides might have a can -- might have in common, they say, whatever the outcome of the election, fiscal largess is on the way. what have we learned about the spending plans of both parties? anna: we just heard from jeremy corbyn, setting out once again

his idea about a green transformation fund, the scale of investment never before seen in this country, how he described it. there are levels of magnitude between the spending plans of these parties, and the labour government does want to go way beyond what we have heard from the conservative party. but the way the narrative has switched, we're talking about and they and the merits austerity we saw for many years. under the previous conservative party administration to this battle come up one government that wants to spend quite a lot and another potential government that really wants to spend. fiscal largess is seeming to be the way forward. how much of that can markets tolerate? that is something we hope to get a sense of when we speak to him shortly, whether he is concerned about the markets getting to soak up all of that, to take all of that in. tom: anna edwards, thank you.

we are really looking forward to that conversation with the leader of the labour party. 8:00ok for that here at a.m., new york time. much more to speak up now. how about a single best chart? let's do that with daniel ahn. what we will do here is greenspan 101. on the equity market, building confidence, the story here from the 2018 low, that ugly q4 a year ago, and up, up we go. how do you link a good feeling in stock prices over to the american economy? from long agoght that disappeared? no, it has been with us for a long time, on the way back to keynes' animal spirit. much of that links to

volatility, and if asset prices continue to our upward, whether justified or not, that may continue to provide some positive sentiment. greenspan 101, last week i believe it was paul speaking there, a single headline. i cannot remember the message, but it was cut to the chase. madame lagarde would probably say asset bubbles. but do you look at the frothiness in the leverage loans or in the equity market, coming toward what morgan stanley talked about years ago? daniel: there is an active debate and there should be, over the amount of financial risk in the system, but also what the role of central banks should play in this. , you know, is that 10 years after the global financial crisis, the system

does look relatively resilient. but at the same time, where way too dependent on central banks to manage everything. managing theand bond market among other things. the treasury yield on a 1.84 handle, is that correctly pricing the u.s. economy right now? i would say it is encapsulating one view on the u.s. economy, and equities are in capitalism -- are encapsulating the other. ,e think that the bond market while it has recovered somewhat recently, and the yield curve is re-inverted back again, portraying a more positive outlook than equities are showing. nejra: if equities continue to move like it has for the rest of this year, could that stop the

fed from cutting in 2020? daniel: it might, but i think the fed looks at a lot of singles -- signals just beyond the stock market. i think the stock market very much is linked to investor sentiment and consumer sentiment, but i think watching closely on a variety of signals, particularly on the u.s. consumer and labor markets, just sort of seeing whether the weakness i highlighted earlier around this investment and around external conditions will bleed through until -- or whether they will remain in -- beinghank you so much for with us from bnp paribas. over the weekend, american airlines staff really concerned about getting on the 737 max. there have been four headlines today on airbus/boeing. with 20i, they will go

less boeing's. air arabia, airbus, emirates, making ats ago, boeing comment on that. you have to keep up with all of this as well. coming up, on saudi arabia and the pricing. they need to find 25 billion warm dollars. it is proving a challenge, to be kind. we will do that next. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." let's get your bloomberg business flash. a couple big deals for airbus today. berg has learned and has placed an order for more than 100 narrowbody plans for air arabia. the list price more than $10 billion. emirates announcing an order for a-350's, the list price for $60 billion. morgan stanley predicts next year american equities and corporate bonds will underperform peers. there also forecasting the

dollar will get weaker. growth outside the u.s. will pick up. morgan stanley says this year it underestimated the aggressiveness of central banks, but it doubts the banks can pull off the same tricks twice. that is the bloomberg is this flash. nejra: saudi arabia has set aramco's valuation well below mohammad bin salman's $200 billion goal. bloomberg's latest development on the oil giant reports saudi aramco canceled a london-led plan by pierre -- by a roadshow. east energy reporter anthony dipaola joins us. let's talk about first a london leg of the ipo roadshow and the cancellation of that. do we know why this has happened? to talkco. not much

about when we talk to the loan leg. like really looking like it will rely on domestic money come on saudi money. they announced yesterday when we saw the updated prospectus that they would not be marketing it in a number of countries, including the united states. the others were canada, japan, and australia. selling toention of the qualified financial institutions in the u.k., so there is said to be some marketing, that is canceled as well. we don't know the exact reason for that, but because they are focusing mainly on those domestic investors and other institutional investors who are qualified to invest through the saudi stock exchange, so some u.k. investors, also you and us investors, will be able to take a piece of the aramco ideal, but through that exchange. nejra: does this ipo still look like a success for saudi arabia,

given how far it is from the plan that crown prince mohammed salman originally had? anthony co. it depends on the benchmark you are looking at there. be thed or could not biggest share sale. $25 billion on aramco, depending on the range of prices they give yesterday, will be north or south of that number. in terms of the wider plan for saudi arabia, they wanted to bring in some foreign capital into the country. on that metric, that does not like -- look like it will be a success. it does not look like they will bring in -- to be able to diversify it away. they want to build up more manufacturing, other industries,

bring in some high tech industries are that will acknowledge there. that relies on more foreign investment, and it does not look like he will be coming from this for an ipo. nejra: thank you for joining us. bloomberg surveillance continues on radio. taking a look at the markets, we saw the s&p 500 hit another record on friday. futures point perhaps to another day of gains, as we have seen some muted gains on european equity markets. meanwhile, the pound, hitting a two-week high after boris johnson said every conservative candidate has pledged to back his brexit deal if he wins the election on december 12. this is bloomberg. ♪

♪ alix: hong kong under siege.

protesters call for more rally as police surround polytechnic university and china calls them violent criminals. saudi aramco's race to the public market. -- concessions to get the ipo done. johnson and corbin face-off. the u.k. prime minister and the leader of the labour party speak at the annual conference of the country's biggest lobby group with less than a month before the general election. we will speak exclusively to jeremy corbyn later on in the program. welcome to "bloomberg daybreak." happy monday. we got up. good job. congratulations. on friday we closed a record high and certain indices at a record high. the question is does it continue? what will be the next catalyst? bond market, princi markets, commodity market quiet. today we bring you the market