for the first time on a partial deal, saying china does not want a trade war. and lagarde to europe, believe in yourself. lagarde calls on europe to invest in the future as growth in the region stagnates. unveilingbotches its of its ev truck by smashing two windows as elon musk tries to break into a very but it of market. welcome to "bloomberg daybreak" on this friday, november 22. i'm alix steel. tgif. happy friday. shortened week next week. 3107.l, s&p futures at we are at risk of breaking a three week winning streak for the s&p. yields a little bit lower. the dow jones is reporting that ray dalio now has a $1 billion bet on stocks, that they were going to fall by march. is it time to start hedging and gearing up for some more

volatility? time now for global exchange, where we bring you today's market moving news from all around the world. from london to frankfurt, beijing to hong kong, bloomberg voices are on the ground with this morning's top stories. want to start in hong kong, where the high court is set to allow the government to reinstate a law banning protesters from wearing facemasks. earlier in the week, the court ruled this very law unconstitutional. or bloomberg china editor leigh joins us on the phone. came after chief executive carrie lam imposed this mask ban last month by invoking a colonial area emergency powers for the first time in a half-century. the court struck it down earlier this week and said it was unconstitutional. it has been flouted by protesters who continue to wear masks to shield their identities from police. this comes ahead of sunday's

district elections here. they are not only a low-key offense come up at time they are happening after more than five months of protests and a couple of weeks of chaos that have paralyzed the city. we are looking to see what happens over the next few days, whether there's going to be any kind of reaction from protesters in the opposition to this temporary re-allowance of the masked man and whether that will have any impact on whether elections will be allowed to go on a scheduled. much.thank you very . in beijing, president xi jinping stressing the need for quality on a trade deal, saying, "we didn't initiate this trade war and this isn't in some that we want. when necessary we will fight back, but we have been trying actively to not have a trade war." bloomberg trade reporter shawn donnan joins us now. this is the first time we've heard from the president on a supposedly trade deal. shawn: this is the first time we've heard from xi since

president trump announced that phase i deal with chinese vice premier liu he, china's top negotiator on these things. xi framing this deal as one that he wants, but only one that he wants if these are on terms that china can accept, warning that china is not ready to be humiliated by a foreign power, citing the history of unequal treaties, which goes back to the opium wars and is something that chinese officials often point to. interestingly, also did that today in a meeting with henry kissinger and other dignitaries who are here in beijing for the new economy forum, sponsored by bloomberg. alix: thank you very much. in europe, the latest read on the economy is mixed. composite pmi touching 50, while orders declined for a third month. in germany, you had better

exports in household spending, offsetting a six-year low in equipment investment. bloomberg's paul gordon joins us in frankfurt. what did we learn out of the data this morning? paul: we learned that there was a risk the weakness we have seen in the manufacturing sector earlier in the year is starting to spread. it comes at an unfortunate time. german manufacturing still shrinking, but at least not as badly as thought. there are signs of stabilizing at weak levels across the euro area. but the surprise came a little later on, just after the new ecb president finished her first major speech, showing that euro area services were weaker than expected. that shows you as people have felt under pressure, either lost their jobs or find their jobs looking more insecure, they are cutting back on spending on services. that is a much bigger part of the economy. get this contagion that requires some kind of response,

whether that be monetary response from the ecb, already very stretched, or whether governments finally decided is time for them to step in and do something themselves, as the new ecb president christine lagarde says they should. alix: thank you very much. speaking of, and her first major speech, ecb president christine lagarde called for a new policy mix. the first is monetary policy. i am saying that because it is my area of responsibility, which will undergo a strategic review due to begin in the near future. alix: bloomberg's maria tadeo joins us at the european banking congress. what were some of the takeaways from christine lagarde's speech? investors don't really know christine lagarde as head of the european central bank. she has been very quiet for the past three weeks. investors don't really know where she stands in the debate, but it is interesting that she

echoed mario draghi, and those comments really telling european governments this is the time to get spending, especially when we are facing a downturn. she also said it is crucial that we complete the european union, a tear reference to the banking union and the single market. those are still very thorny issues politically in the eu. the major take away perhaps is the fact she says there will be strategic review and the tools put forward by the european central bank. we know the context is important because the european governing council was split on the position mario draghi made. some embers of the governing council felt that she does not have to be a mario draghi 2.0, and maybe this is a good time to reassess. having said that, if you are looking for clues to what we would get in december, we didn't get any of those. alix: thank you very much. u.k. labour party leader jeremy corbyn issuing a manifesto.

at the same time, u.k. pmi falling to a three and a half year low. marcus ashworth of bloomberg opinion joins us now. said the economic stage for us. what was the reaction among business leaders? marcus: it was much more of a amusement, really. it's never going to happen. he's never going to get a chance to become prime minister, i don't think. certainly not enough power to actually be able to transact any of these proposals, which are the biggest amount of spending, the biggest amount of taxes, the biggest among to borrowing we've ever seen. the question is whether he could possibly rule in a coalition is a very slim chance. the markets aren't moving towards any form of expectation that corbyn will win. it is more appealing to his socialist sort of dreams. we await the conservative manifesto, which will probably come out sunday. the markets are purely focused on the pmi number, which is the only thing moving sterling.

alix: indeed, downside risk coming out with that. in columbia, demonstrators clashed with antiriot police as hundreds of thousands took to the streets in a nationwide strike against the government. for more, bloomberg's matthew bristow joins us on the phone. what happened overnight, and why did it happen? protesters were angry about a range of issues, including education funding, corruption, and demonstrators included labor unions, students. the marches were initially afternoon,ut by the there was widespread violent in the capital and other parts of the country. demonstrators smashed windows, destroyed bus stops and in bogota, not just central plaza, where they loved tear gas into the square.

in one city there was a curfew, and there were reports of marauding bands breaking into apartment buildings. in bogota last night, a lot of people across the city bank pots together in protest. it remains to be seen whether this was a one-day event, whether it is going to be the start of a longer series of protests similar to what we've seen in ecuador and bolivia. alix: matt bristow, thank you very much. staggering images there. another thing that everyone is watching this morning, including twitter, it wasn't all fireworks and cheers last night when tesla unveiled its cyber truck. my [beep]. well, maybe that was a little too hard. alix: the truck's armored glass shatters twice. it does highlight just how much musk once to crack into a market

that's been dominated by a few players. the thing is, with trucks, you can see these yellow bars, brand loyalty is huge. the percent of households that by the same model continue to crush the company and, controlling almost 90% of the half ton truck segment. japan has been trying to crack the code for 20 years, and now it is musk's turn. >> it didn't go through. [laughter] not bad. there's room for improvement. alix: a little bit. coming up, more on your morning trade and analysis in the markets in today's first take. this is bloomberg. ♪

alix: time never bloomberg first take. we give you the news, you get

the trade and analysis of the market. --may, damien sass our joining me, damien suss our -- joining me, damian sassower, vincent cignarella, and also joining us, dean curnutt, macro risk advisors ceo and founder. the markets feel tired. what you do on a tired friday? vincent: you go out to lunch, which we are never allowed to do, by the way. [laughter] vincent: we talked about this all week, the market really taking bed news in stride really well. it dips and drifts off a little bit, but then seems to gravitate back. good news just gets absorbed really rapidly and moves higher. the market wants to move higher. the market believes, especially after what we heard from xi last night, he almost sounded like trump. let's do a deal. the market really believes they will get something done.

not a lot. just get this whole trade war thing off the table, and then we turn to europe. alix: if they are allowed to turn to europe with auto tariffs. that is the whole question now. alix: there was an interesting -- vincent: there was an interesting story where they can shift away from the defensive to a different trade issue, which will allow them to do so, and which plays to the president's face in the midwest, and off we go. damian: i agree, the market did seem fatigued, especially after that pmi data. you kind of look at the data, yeah, ok, manufacturing may be bottoming in germany and france, but we don't know. you are finally seeing spill over into services. that is not necessarily good. all of the headlines this morning are touting wonderful the data was. i just didn't see it. i think we need to digest a

little bit more and see where the markets take us from here, for sure. dean:dean: the market has got a mood, and it is on the exhausted side, but the worst case scenarios which i think were probably most rep is added by bones going to -70 basis points -- most represented by bunds going to -70 basis points, that probably got tired. the way that the market decides to interpret the data these days, it is a green shoot. that's wait to see more data. of course, there's the optimism on trade, that that wasn't going to be worst case. maybe the last thing holding the market here is on the corporate profit side, not as bad as people worried, but just wondering if that 75 basis points of insurance cuts and the rally in ration we have seen is set to work its way through the financial economy. is that something we still haven't seen the benefit of? vincent: and if we don't see a

political hiccup, something that the market is worried about, for instance, elizabeth warren, is not really priced in. we were talking about this earlier. it's not fully priced into the market, and i think it will be overpriced if it should happen. that will create some volatility. but the markets want to go back 2%, the growth, 1.5%, fed on hold. we will just progress higher. damian: if you can't get to 2% growth, you can just blame census and do what china did last night, looking back at that target. alix: and if you can't do that, just do more stimulus. we heard from the pboc. they have room to adjust their countercyclical policy. if you can't do it, no problem. we will back you up on the other side. dean: pick your sentiment

indicators, your worst five and your best five, and you can paint starkly different scenarios for 2020. one is you haven't seen this coming together of fiscal and monetary policy at the same time. we had one letter working at one time -- one lever working at one time. we had the fiscal cliff in the u.s., austerity in europe. then we had more physical response, but less monetary policy. 2020 is one in which potentially you have continued, ongoing monetary policy that is supportive, and the fiscal expansion we haven't had in a long time. that is the bullish case scenario. vincent: which won't be coming from new york. [laughter] europe really needs to come to grips with the fact that modest steps are not the end of the world. that is not going to happen unless you get germany in a proper recession, where they can

take the handcuffs off and do something. last gdp number in germany, 0.1%. --the traders i talked to most of the traders i talked to are like, did they fudge that number just to get it? lagarde is on the case, but so far getting no support whatsoever. draghi was on it quietly for two years, had no support. that was the fracturing within the ecb. it looks like it is going to continue. if you get no fiscal support out of europe, and if the fracture continues and you don't get monetary support -- where people put money, it always seems to come back to the u.s. because elsewhere does not look very attractive. damian: i agree. if you take stock of what is going on in asia, we get some real data next week from taiwan, singapore, south korea. alix: and no one trading in the u.s., most likely. damian: that's true, but we talked about the integration within asia. we just put out a deck this

morning looking at china's eight largest bilateral partners and where they've gone this year. all went down. south korea, japan, the u.s., obviously. interestingly, you look at brazil, australia, both up year-over-year on a lateral basis, and that makes sense. they had to buy from somewhere. there's bifurcation there. it's disparate. it is not everybody declining in trade all at once. alix: which is why i feel we are seeing such stark 2020 outlook. you have unicredit see 10 year yields at 1.5% and lower earnings growth. then you've got goldman sachs talking about a baby bond market. sensitive assets are going to be rising. they are not affecting anything terrible, not expecting any thing awesome. i know that's how you make a market, but it is literally one of the other. vincent: this may be the first time i've agreed with goldman in 30 years. [laughter] vincent: it is a sound

assessment of what is more lightly to happen in 2020. it is not this far-left, far-right, the world is coming to an end. damian: i agree. most glib outlook i've seen goldman come out with in years. vincent: it's not like, oh my god -- damian: crude oil is going to $100 again. is trying toybody make these big homerun calls, babe ruth pointing to back to left field kind of thing, and they all fail because we are not in that type of environment. the vol is just not there. so goldman's call is probably that nice middle-of-the-road where we are. dean: even if you don't trade option prices, you can look at them as informative. one of the ways i like to characterize option prices, they are reflecting the degree of certainty or uncertainty about things. so let's talk about that. there is a certainty in the

markets about the absence of inflation. not only that it is not here, but it is not coming. it is very much in the narrative. we all talk about things like secular stagnation, globalization, and the epic shortfall that is the central bank a live billet he to stoke inflation -- the central banks' to stoke inflation. i am just saying it is not reflected in option prices. when we try to think about surprises, this is one where, as we talk about fiscal and monetary policy coming together, and the degree to which there is no inflation compensation at all in markets, i think that is something we are supposed to take. damian: that is a great point. ira jersey come our chief rate arategist, just put out deck yesterday a deck yesterday of forward inflation excitations in the u.s. he is not exact the on record as calling for inflation to pick up, but you have to kind of at

least engage these narratives and see how viable they are. you make a great point. i think the market is definitely leaning the other way, and it could get painful if things swing. alix: but for now we are just sleepy. vincent cignarella, damian sassower of bloomberg intelligence, thank you. dean curnutt of micro risk advisors is sticking with me. for all the charts over the next two hours, check out gtv . this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." charles schwab -- if charles schwab does by td ameritrade, there could be a tough antitrust review. the tiafoe would create a giant that would combine -- the tie up would create a giant would combine two of the biggest advisors. since i lockup ended earlier this month, travis kalanick has

now sold almost $1.5 billion of his uber shares. that includes $578 million in stock kalanick sold off this week over the span of three days. in a filing, the company co-founder signaled he could offload his entire stake. his uber holdings now make up less than half of his $3.3 billion fortune. elon musk would probably like a do over. last night, he unveiled tesla's long-awaited tesla pickup truck. two of the truck's armored windows were shattered. you are about to see that really soon. the truck was trending on topics on twitter. the tesla truck, by the way, starts at just under $40,000. that is your bloomberg business flash. alix: is it bad that i think it is kind of ugly? ok. i'm taking a look at hedge funds on an eight month long losing streak. starting in march, there has not been a month of hedge funds that

haven't suffered net reductions. they've lost all mistake million dollars, double last year's level, and the reasons are almost $8ple -- million, double last year's level, and the reasons are really simple. it is difficult to take advantage of any spreads and dislocations, and that has really wound up hurting the hedge fund industry. willard that moore capital be closing some of their main funds. coming up, more on volatility, or they lack thereof. dean curnutt of micro risk advisors will be sticking with me. this is bloomberg. ♪ ♪

alix: this is "bloomberg daybreak. it feels like" a very sleepy friday -- its

feels like a very sleepy market on this friday. the dax just up 0.2%. you've got trade optimism, but not seeing a lot of movement either way. a similar thing and other asset classes. that is raising a lot of questions. is this an august repeat, when we saw pretty intense flattening? does that wind up checking out equities? the record seems to be this time is different, and the fx market totally calm headed into that weekend. over the last two days, we featured some of the biggest world leaders at the bloomberg new economy forum in beijing. is talked about why his firm investing. >> what u.s. investors are looking at his volatility in terms of confidence. as long as the trade talks continue unresolved, what they

know is that chief executives of u.s. companies are going to be reluctant to make definitive countries but at your decisions. that is postponing investment, and something which could have an impact on earnings going forward. though, consumer, continues to be in spend mode. we are in a period of volatility, and one of the things we are focusing on is the economy is slowing down. we don't really see a recession in the next 12 months. anything that remotely represents any type of air pocket or disruption is going to cause a short-term challenge to confidence. for example, the big black swan of 2019, the only black swan of 2019, really, has been what happened in hong kong. no one really predicted that. >> when you look at some thing

like hong kong and the lack of options on the table for both sides, does that make you want to sidestep that market? >> hong kong is a very stable market. if you look at the capital markets over this whole period of volatility, even the violence , the hong kong currency is pegged to the dollar. the hong kong stock exchange is probably one of the most professionally trained parent and regulated -- professionally transparent and regulated in the world. it is on par with the new york stock exchange and the london stock exchange. investors are very comfortable with hong kong. >> see you are not seeing concern with money markets in hong kong? we are seeing money markets being squeezed, cash demand up, and the hong kong dollar being pressured on the peg. >> one of the things i think we are all excited about, and 2020, china is going to open up their financial services market to international ownership and control.

hoping we can use this fact to rebalance the discussions on the u.s.-china relationship because it's been very focused on technology, but when you actually look at financial services, the chinese have been very open-minded about bringing financial institutions, international financial institutions, into their market. it is a $43 trillion market, and they want her national expertise in that market. 20/20 is important. pimco is very excited about the chinese market. it is a $12 trillion bond market. it is actually a bigger bond market than japan. >> will you be adding positions in china? >> we are talking to the csrc about our business strategy there. alix: that was pimco vice-chairman john student ski -- vice-chairman john studzins ki. set, deanre on

curnutt of macro risk advisors. you are already talking about the lack of cross asset vol. you've got the vix, the move index, fx vol all super low. what is the trigger for that picking up, and how do you profit off of maybe selling it? i don't know. what do you do? dean: the first thing, this is confounding, especially in fx. are set apart vol from things like the vix. fx is a real head scratcher. so what is it that drives, for example, fx volatility so low? there's a fair amount of forward guidance compounded in things like the euro-usd relationship. is certainly not raising rates, and the u.s. has basically promised something similar to that. what gets this going, i like to

say it is new news. the market has to confront something that maybe it wasn't expecting. i think, as we talked about in the last segment, this free pass that the market has given to the economies on global growth i think is interesting, but it is real. in other words, you are looking at something as half-full right now. u.s. pmi is below 50, and the market says, ok, we are ok with that because with think it is stabilizing. there's this narrative out there that it is happening in the rest of the world. at the end of the day, it is economics and corporate profits that are intentional catalysts to volatility. of course, something on the trade front, something that moves us the things are improving narrative. in the last thing is the structure of markets themselves. part's illiquidity born as of present-day markets, and there could be some rush to unwanted positions creates some version of a domino, where there is a risk off that sets in motion something that is not

systemic risk, but people are getting out of the way because prices are falling. alix: in the equity market, i feel like there is a distinction between now and later. i find this chart really interesting also, the six to one month future spread for the vix, which applies that markets are expecting more volatility in the next six months. reported today that ray dalio bella to libby march -- on volatility in march. on a you need bigger moves daily basis to sustain something that allows you to make money owning options. otherwise, you're just going to eat what they call the time decay, meaning you are not getting enough daily volatility. this difference between the three and the six-month is actually quite fascinating. set against that story on bridgewater, it is always hard to know. is it offsetting? at face value, based on

reporting, that is a gigantic position. reported that they bought $100 billion of notional, $1.5 billion in premium. that is a huge trade. it is also struck out to march. why? potentially, that is where you get super tuesday. so the march expiration will get you the hedge through i believe march 4, which is super tuesday. of course, there's worries. i think dalio might have said cooperman, all saying that a war in presidency would be bad in the market's mind, so maybe you are setting yourself up for a hedge in march for that reason. alix: looking at the bets on the different democratic candidates, is that a correct hedge? but have you noticed in terms of the market looking at a worn presidency? dean: i've created an index summing warren and sanders, the bookie bets. . you can actually place bets on

google for the nominee. then your moderates might be mayor pete and biden. that difference when very high, mostly due to warren's surge, which has since come down a lot. you might say that as folks like barack obama speak about maybe potentially going to far-left and that not being a winning recipe for success, that enthusiasm for the far-left agenda seems to have come down, at least through the booking markets. alix: so is hedging that risk now not a good idea? dean: i think it is worth it because the market is driven by narratives. it is sort of the kings beauty contest. don't vote for youth inc. is the most beautiful. you vote for who you think everyone else things will be the most beautiful. with warren being the nominee, i think it is the coming baked into the market psyche. how do you do it? s&p options are expensive, as you pointed out. there is a premium going out

three months. there's other ways to do it. you can do what i like to call a proxy hedges. you have things correlated to the s&p and a risk off. gold is a favorite of mine. gold vol has come down again a lot. it spiked earlier this year as rates came down and gold spiked. it has since come off a lot. it is not perfect. . you don't wanted to be your only one. but the cost savings, i think that is supposed to be in her basket of hedges. alix: what about individual sectors that might be related more, like medicare for all with elizabeth warren? is that a good bet? dean: hard to say there's been some good trades in the health care etf. it's difficult to know exact where these things come out. in fact, when she pivoted to say we are going to put this plan in motion over the course of three years, the sector actually rallied in a relief fashion to say, well, we are not going to do it all in one fell swoop. so i think it is a little too

early to say. i like to say with macrophages. alix: thank you so much -- with macro hedges. alix: thank you so much, dean -- dean curnutt, micro risk advisors ceo and founder. now we want to get the first word news with viviana hurtado. viviana: president xi making the first remarks on a partial bill he could sign with president trump. he said china did not start the trade war. "it is something the chinese certainly don't want." the government is in business until december 20 because president trump signed a temporary spending bill. it averts a government shutdown. congress is still negotiating the 12 spending bills that make up the budget. the biggest roadblock, white house demands for $9 billion to build a wall along the border of mexico. one of president trump's recent picks for the federal reserve board raising eyebrows with her comments. she is challenging an article of

faith about the central bank list last month in private comments to a banker. she cast doubt the fed should operate free of political influence. the white house has yet to formally nominate shelton. if the president goes ahead with it, her remarks make up a caterer nomination. 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. i'm viviana hurtado. this is bloomberg. alix: thank you so much. coming up, the bulls are back. fading recession risks have global investors feeling optimistic. more on that in today's bloomberg businessweek feature. as we had to break, check out the bloomberg terminal. go to tv . watch us online, click on charts and graphics, interact with us directly. go to tv on your terminal. this is bloomberg. ♪

♪ viviana: you're watching "bloomberg daybreak." ray dalio's bridgewater associates reportedly has bet more than $1 billion on a big market drop by march. according to dow jones, the report says the wager was assembled over a span of months. the bet would pay off for bridgewater if either the s&p 500 or the euro stoxx 50 or both decline. bridgewater is the world's biggest hedge fund. softbank is looking for a way to reduce the size of a 3 billion-dollar dollar offer for wework stock. that was part of its rescue package for the struggling office share startup. bloomberg has learned the move would be designed in part to limit the amount paid to we were co-founder adam neumann. wework employees were outraged with the deal given to ne umann. popular air apple's

pod headphones are expected to double this year. it will ship 50 million of its decisive's -- of its devices. $249, but no word if apple 4s.with alix's alix: to be fair, it is an apple 4se, but it definitely will not sync. google ones to do business with the military. it's employees, not so much. then, investors' joy replaces gloom. if you are not one of the investors who panicked and sold off your assets during this year's economic uncertainty, rejoice, because the bulls are back. and amtrak's profit ability plan. snack bars, sandwiches, and drinks on those rights might be gone with the new ceo's plan for

the company. joining me is peter coy, "bloomberg businessweek" editor. the cover story is google at war, and it is a play on words. the heart of it is capturing google wanting to do business with the military and the employees not wanting to, and that tension. peter: a great story. they're capturing a moment when it is still not clear how this war, this internal war in google, is going to work out. the company has a history of don't be evil, silicon valley kind of laid-back culture. we are here to make information available to the world, versus the people saying, look, you've got to supply technology to the department of defense, and that is the american thing to do. look what happened. in 2015, next year they started their cloud ai effort. the year after that, they

decided to open a lab in beijing, which was like hitting a hornets nest as far as the defense to permit is concerned because china is of course the arrival of the u.s. in ai. that was hugely controversial. they followed it up by refusing to do a project maven, which was to analyze imagery from military drones. that further infuriated the pentagon. they refused to bid on a $10 billion thing called project jedi. at that point, it looked like they had reached about just as bad as you could possibly get with the defense department. now they are trying to climb back into the good graces of the defense department. alix: with the employees really not happy about it, among other things happening at google. let's get to a story you wrote, which is basically that six weeks ago, eight weeks ago -- peter: three months ago, and august. alix: from everything is awful to everything is awesome, like

"the lego movie." peter: i would argue that investors were probably overly pessimistic in august, and they are optimistic now. we had the inversion of the yield curve, the twos and the tens, and that triggered a really bad day for the stock market in august intraday. then of course, we had worries about china, brexit, and so on. since then, we had two more rate cuts by the federal reserve. we had the ecb coming back in and resuming asset purchases. the monetary policy has turned sentiment in a positive direction. we had highs in the stock market indices in november. it's really quite a turnaround, and it is just so fascinating to watch. again, which group is right?

was it the bears were right back then, or the bulls are right right now? alix: the answer is yes. [laughter] alix: let's get to our third story. amtrak apparently has a plan for profitability, and i now can't get my snack. . is that what is going to happen? forr: if you are looking dining service on a multi-day train trip from chicago to the west coast, that could be a problem because richard anderson is the ceo of amtrak, better known to most of us bloomberg tv viewers as the former coo of delta, the men who took delta from coming out of bankruptcy to profitability. -- high onreport timer liability. after a brief retirement, he was lured back to run amtrak, and is playing some of the same manage and lessons -- same management

lessons to this money-losing train service. alix: oh man. a three day trip with no dining car? peter: maybe you shouldn't be taking that three-day trip. one of the thing he wants to do is segment those trips so you don't do those. alix: fair point. peter coy, thank you so much. you can read all of these stories and more in the latest issue of "bloomberg businessweek," in digital and on newsstands now. in today's off the beaten street, we take a look at an unlikely critic of tech companies calling for greater regulation of facebook and media giants. >> all this hate and violence is being facilitated by a handful of internet companies that amount to the greatest propaganda machine in history. i believe that our pluralistic democracies are on a precipice, and that the next 12 months, the role of social media could be determined. alix: the british comedian best known for playing the role of

borat spoke at the anti-defamation league, and went on to say, "if we want to stop hate, we have to regulate social media," at a time when social media companies are looking for even more to do, like creeping into the world of finance. however, if you do that, you have pushback from bank ceos. michael corbat at citigroup has a warm welcome for facebook. highlyu care to be regulated and trade at 10 times multiple, we would love to have you join." coming up, the 10 year yield at a crossroads. if you are heading out, tune into bloomberg radio on sirius xm channel 119 and the bloomberg business app. this is bloomberg. ♪

alix: i'm not for traders take.

going to me is vincent cignarella, voice of bloomberg audio squawk. we were just talking about the twos tens. you are taking a look at the 10 year. vincent: you can see it is in this ascending channel. we've been talking about this since the beginning of october. crossroadsa bit of a of where we go from here. the 10 year to me is the thermometer of the market right now, taking the temperature of what sentiment really feels like. i guess is that we ascend back where we climb back into that ascending channel, as the trade tensions seem to want to wax and wane and then fall off. xi was saying last night that he likes the possibility of a bill. alix: that is very much the baby bond market, the goldman call, basically. vincent: i think we fall into this nice place somewhere between 1.80% and 2.20%. it isn't a major negative for

markets. i think the markets will take it in stride. alix: if it doesn't, does that give the trader a signal? what do you think? vincent: it would have to drop off back to 1.5%. if it sits right here, all the market is telling you is we don't know where things are going. there's too much uncertainty. a negative signal from this standpoint, with that, you won't see increasing, you won't see more trades coming back to the market. alix: vincent cignarella, thank you very much. happy friday. coming up, art hogan, national security market strategist, and sarah hunt, alpine woods portfolio manager, will be joining us. this is bloomberg. ♪

♪ alix: welcome to "bloomberg this friday,

november 22. i'm alix steel. here's everything you need to know at this hour. . europe flirts with contraction. >> we learned that there was a risk that the weakness we've seen in the manufacture and sector earlier in the year is starting to spread, and it comes at an unfortunate time. alix: composite pmi falling to 50 last month as orders fall for a third straight month. >> we face a global environment that is marred by uncertainty, but i believe that if we approach this challenge in the right way, it can also be a moment of opportunity. alix: christine lagarde makes her first speech as head of the european central bank. >> we are confident that both countries want to find a resolution. alix: world leaders weigh in on at the newwar economy forum in beijing. >> xi framing video as one that he wants, but only if these are

on terms that china can accept. alix: china's president says a trade agreement must be on the basis of mutual respect and equality. hong kong court lets the government ban masks for seven days after ruling get unconstitutional on monday. >> this came after chief executive carrie lam imposed this mask ban last month by invoking a colonial era emergency powers for the first time in more than a half-century. alix: hong kong preparing for local elections this weekend. chief executive carrie lam has threatened to postpone them if there is renewed violence. and it wasn't all fireworks and cheers last night when tesla unveiled its cyber truck. >> oh my [beep]. well, maybe that was a little too hard. alix: the truck's armored glass shatters twice. analysts are now giving it a pass.

for me, i can't imagine parking that on the streets in new york. in the markets, it is a very sort of sleepy friday. a lot of news flow, but not a lot of action in the market. 3109 is where we sit. you are seeing the curve continue to flatten. you'll down by about two basis points. running me now, art hogan, national securities chief market strategist. be honest, using the truck is cool? art: i think it is one of the ugliest trucks have ever seen. alix: thank you. art: it might find a niche market with fans of "blade runner," but in terms of the chevy silverado, getting units .old

alix: i agree. what are you watching today? art: it is interesting. we wrap up this week of the retailers, and the amazing story about all of that is how contained all of the bad news in retail can stay out of the s&p 500. the consumer is very important for the economy. the message we've clearly gotten this week is the consumer is fine, but the consumer is picky about where they are going to do that consuming. the real story is we still feel confident about the consumer, but we know that you have to have a great experience and the ability to want to go to the place you are buying things. that has never been more clear than this week. i think the great news is that we still have a trunk consumer, but still a tad too many stores. alix: chinese president xi jinping stressing e quality is really the key for a phase i trade deal with the u.s. income its overnight, saying, "we didn't initiate this trade war and this isn't something we want.

when necessary, we will fight back, but we have been working actively do not have a trade war." joining art and i now is sarah hunt, alpine woods portfolio manager. we are confronting news in a totally different way than three months ago. sarah: it is amazing to me that all of a sudden, everything is going to be ok. the backstop of central banks can't be, you can't under into be, you can't under emphasize that enough. even in the face of some of this news come over you would think some of the discussions about trade and some of the more strong positions on the chinese side would have hit this market a lot harder had we not had the backstop of the fed. this is really where we are looking into the end of the year. as long as you don't get anything terrible, as long as you don't get tariffs in the middle of december, the markets are probably going to continue to stay strong. right now, i think the equity markets just look what they want to go higher. art: it feels like, to your

point, the difference going into this december and last december was the fed. last december, the fed was on autopilot, and talking about actually raising rates this year three times. patient,ted to being and pivoted to being the backstop. and by the way, i think their hurdle to making more change is much higher in raising rates that it is to lower it. if this escalates and we get december tariffs and things start to pivot in the wrong direction, they are ready to cut again. alix: is this just a short-term thing? i was talking about this in the last hour, the curve for the vix. you have the six-month versus the one-year parking up pretty steep -- one year picking up pretty steep. you also have ray dalio coming in with an enormous bet in the options market that sees a decline in stoxx in march. obviously, we don't know why you make a bet. it could be offsetting other

positions, whatever. but the idea that in three months, things could get bad, and six months things could get bad, what do you thing about that? art: i think you can make the argument that things go well with china, and yet the market rose over. phase i is going to be limited and remove a lot of uncertainty, but there is a lag between removing uncertainty and seeing, and that is what we want to see -- and seeing capex, and that is what we want to see. i think there will be a modicum of disappointment in the first quarter as we say phase i deal capex isn't, but going to pick up. sarah: i would agree with that. alix: so how do you look at 2020? we seen some really binary calls, but even within the binary calls, they are not that extreme. unicredit, for example, 1.5% on the 10 year. then goldman says there is a baby bear market for bonds.

they see up to 2.25% on the tenure. that's kind of a glass half-empty thing. sarah: i think you're still stuck with, if you're going to continue to have lower rates, people are almost forced into equity markets. you could see some volatility and perhaps correction into the spring because you have people getting into this year, but you don't have a lot of other places to put money. you still have a huge amount of negative yielding debt across europe. it is hard to see how the 10-year goes very high given that rate differentials just can't be that big. correct, if goldman is and they probably will be, i think the other end of that sector is right around 2%, 2.25%. that is not going to be a detriment to equities. that is not the trigger point where people say, that is great. i am going to move to 2.25% yield versus the s&p 500, probably yielding the same thing at the same time. alix: when we hear about the

spread flattening again, everyone talks about how that happened in august, that is terrible, what is the difference between now and then? are we going to see a shakeout, or is this actually different in the markets? what do you guys think? we don't really want to talk about that, alix. [laughter] sarah: everybody in the summer was like, are they going to come or will day? now you vector -- are they going to, or won't stay? now you had that happened. i don't see them cutting again right now. i see them standing still for a long time. i see europe staying where they are and continuing to buy assets, and that is the problem. alix: i see the difference. art: it's not different this time, but it wasn't that big a deal the last time. [laughter] art: the problem was, you were talking about a flat or inverted yield curve where the integer was one, which we've never had.

so we don't know that is a signal of anything. with $7 trillion of negative yielding debt floating around the world, it doesn't make any sense to use that as a clear sent bill because we don't have a clear signal because we don't have any template -- a clear signal because we don't have any tempo for that. -- don't have any template for that. sarah: you have to look for something, and value does look good, but you have to be careful of value traps. some areas just become stuck. you look at energy and say there should be value there, but some of these sectors are stuck in places where people don't want to look at them. art: russell 2000 is going to outperform the s&p 500 over the next six months. mean reversion has something to do with that. it also has to do with us not needing to justify that glamour momentum stuck. the first part of shifting from growth to value is looking at that growth at any price. i think that started with wework

not becoming a public traded company, and the government looking at regular snow some of the social media names. that has helped rotation into things that are more reasonable he valued. alix: more important, which one of us talks the fastest? [laughter] alix: we are all fast talkers. art hogan of national securities and sarah hunt of alpine woods will be sticking with me. coming up, we discuss christine lagarde's comments about changing the approach to europe's economy. this is bloomberg. ♪

is lagarde: the first monetary policy. i am saying that because it is my area of his possibility,

which will undergo a strategic review due to begin in the near future. alix: that was christine lagarde making her first public speech as ecb president, calling for a new euro area policy mix. joining us now for more, bloomberg's michael mckee. art and sarah are still with me as well. i had to laugh when i heard from the speech, just feel better about yourself, guys. let's have confidence in the euro area economy. i thought that was funny. michael: she didn't have a whole lot left. the markets were hoping for more in terms of monetary policy. where does she want to go? does she think negative rates work, etc. but she basically came in and said, we've done about all we can do here. maybe we can squeeze a little more out of it, but it is up to you on the fiscal side to do something. as we talked about before, that is not going to happen. that is a problem for the euro zone if things continue to deteriorate. today we got bad pmi's out of europe that suggest that is what happening. alix: where they bad, or were

they less bad than they could have been, and maybe we are stabilizing? michael: there was an analyst who said that this morning. the best way to look at it is it could have been worse. but no, they are not good. the composite indexes all just barely above zero -- or the 50 line. it does suggest that the slowdown continues. there had been some green shoots. people were hoping that the euro zone is turning around, but there is still a lot of pain to go through. art: when you talk about the fact that we have also fiscal policy is what they need, but that is not going to happen, is that?y at the center of is germany's reluctance to do anything on fiscal policy make it the key to everything? do you ever see them flipping? michael: i don't see them flipping under this government in this situation. two problems. one, they don't think it is a big problem yet. germans look at the un-employment rate as their key indicated. the un-implement rate is very low. the finance minister said last week, we have very low

unemployment. we don't see a problem that we need to react to hear. they also have this law that says they have to basically have a balanced budget, and in the event of a recession, they can spend a little bit more, but it is not a recession yet. at this point, they don't have any plans to spend money. they are the ones with the giant current-account surplus. they are the ones who could drive the euro zone. they don't want to. alix:alix: then the question is, do we get that banking union thing? we heard from the deputy finance ministers of germany as well, saying we made some progress. here's what he had to say. >> i thing it is a question of whether we will have something definitively agreed in the next two or three weeks. i think the key thing is there will be progress soon. we definitely aim to see first results in number. alix: is that anything -- in december. alix: is that anything? michael: it is something in the bankshoring up

and things that the euros on has wanted to do, but that is more on the regulatory side. it isn't necessarily going to spur additional lending. part of the problem is there isn't a whole lot of additional demand for loans. that just with flex the economic situation in the euros on right now. art: do we think brexit breaking one way or the other is going to be a positive or negative? does that affect growth in the euro zone, or just the fact that we have a global cannot slow down, a lot of it around trade, affect manufacturing in germany? michael: pmi's were terrible today, and for the euro zone, but at this point, we don't know exactly when it is going to hit, and when it does, that will be some sort of inflection point. you ask if it is good or bad news. we don't really know. by the time we get there, it will probably mostly be priced in. at this point it could go either way. you could look at it as a signal that bad things aren't going to

happen for a while, or we have finally crossed the rubicon to mix countries and rivers. [laughter] michael: we've finally crossed the channel, and now we get a dip in the economy in the short run, but things can move up because uncertainty is lifted. alix: sarah, is erupt a value trap or value -- is erupt a value trap or value -- is europe a value trap or value? sarah: there are some opportunities, but you are stuck in a low growth arena. these are hard things to fix. it is not an easy thing. if you do not want to do anything on the fiscal policy side, which they keep making clear they don't in the short-term, it is very hard to see how you get out of a morass. adding negative rates to more negative rates doesn't seem to be doing anybody any goods, and it is certainly difficult for the financial system, and it is going to put a huge amount of pressure on pensions and ever

thing else. there's a lot going on under the surface that is still problematic. art: i think sarah is right, and i think your question is right. it is such a good-looking value trap. the multiples are always so much lower. we always say, as compared to europe, this looks great. you look at the currency issues, and that looks even better. you are always saying to yourself, doesn't this look so much more attractive than the multiples we have in the united states? that has been the case for a long time. i think the better way to look at this is, are there opportunities in emerging markets that look better in a stable growth environment? it is enticing on a multiples basis, but i think it is a trap, at least for a year or two. alix: i want to do ask you about the news we heard overnight on central-bank independence. shelton giving an interview to someone on the sides of the imf, talking about the fact that there is no law that says they should be independent.

what do you make of this conversation coming back again? michael:michael: she's always had views outside the mainstream. the interesting thing is she is winning to express those, even though she's a no money. we've never really seen nominees for any administration post talk after they've been sort of nominated. her paperwork has not gone up to the hill. they don't want to offend one side or the other, so they meet privately with senators and keep their mouth shut. she says that she is going to keep speaking out. the question is, how does that reflect on the senators up on capitol hill? she was never particularly popular. do they actually show some deference to the president and say, we've got seven seats, we can have one who is a real outlier? or does this disqualify her? the third possibility is the nomination just never goes anywhere. as i said, neither she nor christopher waller, the research director who the president has

also said he is going to a point, neither of their paperwork has gone up to the hill. . they haven't been officially nominated yet. we are going into an election year. it is very rare for nominations to a sensitive post like that go forward in an election year. so these might just die. alix: it might just be conversation fodder again about central back it up and it's. michael mckee -- central-bank independence. michael mckee, thank you very much. art hogan and sarah hunt sticking with me. much more on the program. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." sneaker retailer footlocker posting third-quarter earnings that beat estimates, plus same-store sales rising above 6%. that is a relief to investors after a slump in recent quarters. footlocker probably will benefit from nike's decision to stop selling directly on amazon.

tdcharles schwab does buy ameritrade, there could be a tough antitrust review. the tie up would combine a $5 thelion giant that combine two companies. schwab may hold about half of the market. td ameritrade may have up to 20%. since the lockup ended earlier this year, travis kalanick has now sold almost $1.5 billion of uber shares. that includes stock kalanick sold off this week. he has signaled he could offload his entire stake. his uber holdings now make up less than half of his $4.3 billion fortune. alix: thank you so much. we want to turn to hong kong. the high court there reportedly allowing the government to reinstate a law banning protesters from wearing facemasks. earlier this week, the court ruled that very law unconstitutional. for more, karen leigh,

bloomberg's greater china editor, joins me on the phone. but using is behind this decision? karen: it is very controversial here. they said it was unconstitutional earlier this week, so a bit of a switch. chief executive had imposed the mask ban last month. she invoked a colonial era emergency power for the first time in more than 50 years to do it. it was pretty quickly and deliberately flouted by protesters, who continue to wear masks in order to shield their identity from police. this comes a few days of hedge will -- of scheduled district elections here, normally a low-key affair, but this year people are going to be watching them very closely. it is the first time people have been able to go to the polls and express themselves since this unrest began. we will wait and see if this kicks off any new protests ahead of that boat on sunday. alix:alix: do you have -- that

vote on sunday. alix: do you have any read as to the influence china may have had on this? karen: it is hard to know. it is very opaque. it raises the specter of more direct intervention in hong kong's judicial system. the national people's congress was the only body with the authority to improper it -- to interpret hong kong law, a claim disputed by some here, including the hong kong bar association. while it is hard to know, that is what they said earlier this week. i think all eyes now in hong kong, and probably in beijing, looking towards these elections in the next few days. alix: thanks very much. i appreciate you joining us. art hogan of national securities is with me. what is your take away? art: three things. lawsr congress just passed

supporting the protesters, vucevic was the right thing to do. whichthat -- protesters, i think was the right thing to do. doing that, knowing that it might affect trade. we always knew that china might become more like hong kong has became more a part of a deviled world, and it is not. it is going the other way. the worst diskettes, the more you have to think about the fact that the banking center in china now will likely move from hong kong to beijing, which is a huge mistake because that is going to slow down china's growth. i think that is one of the first mistakes made. alix: that is a really interesting point. coming up on this program, a robust retail season. we are going to break it down. this is bloomberg. ♪

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every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. alix: this is "bloomberg daybreak." i am alix steel. sleepys like a very friday, that is how i am describing the market. constructivemore verbiage out of china's

president xi jinping and headlines as ray dalio makes a huge billion-dollar hedge against the equity market in march. interesting to say why or how he is doing it. in other asset classes the question we are asking, the 2-10 spread continues to flatten, doesn't mean anything like it did last august? that is the question for the market. we have breaking news for you. i'm trying to get that up. walmart apparently will stop its new york city fresh grocery business. it will close warehouses and they will cut about 200 jobs. sinceervice has struggled its debut about a year ago. this was a jet subsidiary it bought and it will end its fresh fruit delivery service. i wonder how much that pressure on amazon and the idea of how you reach millennials and get

loyalty. walmart bought jet in 2016. they will now close that business in new york city. interesting take. a ton ofetail, we have earnings. have and have-nots. ves, footlocker having a killer quarter. nordstrom's coming in strong. kohl's.-nots, macy's, plus you have black friday in one week. joining us to discuss is a lie essay boat of compass diversified holdings ceo. you can see some of the firms his partners acquire. they arrange from specialty retailers like baby and liberty safe to other smaller industrial companies. art hogan and sarah hunt are still with me. elias, thanks for joining. you have a unique view due to

the fact that it is middle-market and you have specialized businesses in the retail. how do you see it? elias: we see the consumer being very strong right now. all of the macro data continues to support strong consumer spending. our consumer businesses reported strong growth in q3. we expect that to continue to q4. on the flipside, the industrial businesses are under pressure. the trade war continuing to endure, commodity prices week. the industrial side is softer than what we had anticipated. alix: let's split it into two. we will start with retail first. is the retail season going to be good? are your business is going to make money on the holidays? elias: we think so. all of the macro would suggest that retail should be strong. payroll growth continues to average 1.7% year-over-year.

you have wage growth a couple percent on top of that. 4%, 4.5% payrolls data. debt services low. importantly, there is a high number of job openings. the consumer is confident. that typically leads to strong spending. i will give you a couple of callouts we are looking for. thanksgiving comes later than usual this year. there will be fewer shopping days. on the flipside, cyber monday is on december 1. everybody gets paid on november 30, so that could be an offset. 3.5%, 4%l, we think aggregate retail spending growth seems to be in line. of: when you look at some the mid-cap names in retail, are you looking at the new disruptive brands or are you looking at somebody that is new enough to the market they are ahead of the technology curve and can get this to you however

you would like us? elias: we are looking for niche leaders and companies that can be disruptive. we are always looking for what is the product they are bringing. it has to be great value today. you have to give the consumer a reason to want to purchase. i will give you an example -- 511, a company we bought, primarily servicing first responders for their moved intol needs, the consumer segment. it is a great, durable product, it is flexible, it has all the capability somebody once at a price point people can strive to get to. you have to deliver value proposition today. i would say the way we go and interact with our customer today is different. historically, you would be able to have your merchandise on the shelves of large retail distributor partners.

today that is moving online. we look for companies engaging with their customers and a new and different format. that engaging with consumer, has that entirely moved to social and you see any issues with that in terms of customer acquisition? elias: it has moved primarily to social. in a lot of cases you have to have influencers you are working with. we like to work with micro influencers. the macro influencers are for some of the larger brands. for our niche enthusiast brands we are acquiring, the micro influencers are more authentic to those brands. the cost is staying relatively stable. it is a different avenue by which you now have to interact. alix: sarah, you will bridge the gap. you have consumer discretionary down 2.5%. industrials are the best performing sector in the s&p, up

4%. you buy them, do you not? what do you do? sarah: on the industrial side you've seen a move back into some of the cyclicals because people are thinking if we get trey done, we get this. but the cycle does not start right away. i am looking at the moves and some of the industrials. that is getting a little ahead of yourself. arehe other hand, people looking at places they were underrepresented before. if they think things are getting better, they will go to the cyclicals. you have had so much money are looking at places they were underrepresented before. where you've done well and there are areas where they have not. you look at the difference between a ross store and some of the less good performers, like a kohl's, all over the map you see the differences. people are looking for places that will benefit. alix: that was a bridge to industrials. capex thing.the are you holding back capex

because of trade? elias: when we set our budgets for the beginning of the year, we have expectations for how the companies will do. capex has three months, six month, nine month time frames from when you place the order when it gets into service. spending wascapex set almost a year ago at relatively strong levels because we saw activity much stronger. as we commented 2020, activity is less. you see the headlock -- you see the headline pmi numbers far lower. the natural inclination is to pull back for 2020 capex spending as we are planning out next year. art: have you had any difficulty or had to change your supply --de get your supply train your supply train and has that

changed how you do business? we moved most of our supply chain out of china predominantly for ip reasons. we were finding ip theft, especially for certain brands, was too much. we moved to vietnam or laos, cambodia, bangladesh for a lot of what we are producing. we have some exposure to china. products we are still purchasing, i would say the impact has been relatively muted. we all know the chinese yuan depreciated so we had the ability to go back to our suppliers and get price concessions. we had some margin we were able to absorb. we passed a lot to the retail partner. a littleen absorbed bit by each party and it has not

manifested at the consumer level. alix: you want to be a buyer or a seller right now? elias: we operate a private equity like business. we are always looking to buy companies and sell companies depending on where we are in the cycle. we sold two companies this year. asset prices are at historically high levels. there is more capital chasing deals from every aspect of the capital structure. from private equity companies all the way through banks looking to lend more, that is leading to high prices. we are sitting on over $1 billion today. we are having difficulty finding companies in this market, given elevated price expectations. alix: talk about the cash on the sidelines. o of compass. art and sarah are sticking with me. we want to give you an update on what is making headlines outside

the business world. viviana: chinese president xi jinping stressing the need for equality in a trade agreement with the u.s.. first public remarks in a partial deal he could sign with president trump. he says china did not start the trade war and it is not something the chinese one. the government is in business until december 20 because president trump signed a temporary spending bill. it averts government shutdown. the u.s. congress is still negotiating the 12 spending bills that make up the budget. the biggest growth loss, white house demand for $9 billion to build a wall along the board with mexico. rage in latin america has spread to colombia. more than 2000 people demonstrating. there was a strike against the deeply unpopular president. they want to put pressure on the government to reform pension and labor laws. 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. i am viviana hurtado.

this is bloomberg. alix: thank you so much. tesla's new electric pickup cyber truck demo does not go as planned. will loyal customers look beyond the mishap? more on today's bottom line. bloomberg users interact with us. gtv on the terminal. rows the features, check it out. this is bloomberg. ♪

viviana: you are watching "bloomberg daybreak." i am viviana hurtado with your bloomberg business flash. ray dalio has been a billion dollars on a big market drop by march. the wager was set over a span of much.

ift would payoff bridgewater either the s&p 500 or bridgewater declined. bridgewater is the world biggest hedge fund. softbank is looking for a way to reduce the size of a 3 billion-dollar offer for we work. that was part of its -- for we work stock. the move would be designed to limit the amount paid to wework co-founder adam neumann. employees were outraged with the deal given to adam neumann. elon musk would probably like to do over. he unveiled tesla's long-awaited electric pickup truck but it did not go as planned. two of the trucks armored windows were shattered. you can see it right there. for a while, the truck was the number two trending topic. truck starts at just under $40,000. i am viviana hurtado and that is your bloomberg business flash. time for bottom line. alix: we will take a look at companies worth watching this morning.

art hogan of national securities and sarah hunt of alpine woods. would you buy that car? sarah: that is not a car for me. art: we can all -- alix: we can all agree on set that is the case. it does show a push into a super competitive market. if you are a truck buyer, you are super loyal. what is your take on that? you have had such a pull forward in demand on the auto side it is hard to see how you can continue to have higher levels of auto production. the u.s. is tapped out because you've had so much cheap financing, you have too many cars on the road that are brand-new. you went from nothing into thousand nine to an acceleration and now you're telling off. art: it seems like the pull --ward on officially artificially inflated what we thought should be for car sales, now feels like it is $17 million going to $15 million.

that is why automakers are struggling. three years from now we will not be talking about this because demand might pickup. we do not know what that will look like. may skip internal combustion engines 100% just have electronic vehicles, much like they never had a landline and only had cell phones. president trump called into fox and friends so he is giving updates on trade. he says a trade deal with china is very close and there is a "very good chance" to make a deal with china. take a look at what is happening with the markets. you are seeing futures kind of go nowhere. it does kinda cars and that there is a story in the market that if you get a deal with china, trump will refocus his sights on europe. there seems to be a lot of confusion about whether he can impose auto tariffs on european carmakers because he missed a certain deadline. you think any of that is factored in right now? sarah: i think just the fact

that the sales have been lower has been a bigger driver of those stocks than whether or not the tariffs will come in. the bigger problem is the fact that china -- you have more problems selling autos. i do not think that is in the auto stocks right now. i think that would be a negative. that but ie with also say getting out of this phase one deal and being able to news -- to choreograph when the white house needs it indicates he will push out a tariff on autos until the end of the election cycle. the white house needs the appearance of a victory regardless of what a phase one deal looks like. pivoting from that and going after europe and european autos would be a massive mistake. sarah: especially with europe so week. it would add to a problem globally we do not want. alix: you get the feeling there is an auto company that is not and has priced all of

this negative auto growth in? sarah: i think you have companies on the technology side of auto and are interesting things there. when the numbers are coming down it is hard to see that. people do not get as excited about what is going on when they are afraid the auto markets are slowing. you cannot be the best house in the neighborhood until you start to see a plateau of where you think the numbers will go. art: strangely, when we look at the 2009 timeframe and look at ford who came in and out of that in the best shape, they are in the worst shape now. they basically make the ford f1 50 and basically nothing else people are caring about. they make sedans no one is buying anymore. chrysler is doing exciting things with their jeep rands, but the recent acquisitions they are eyeballing looks like tying two stones together to see if they will float. industrylook at an that is in secular decline, the

worst thing you could do is say let's get larger in an industry that is in decline. i think chrysler has done a great job with their jeep brand and that is about it. toyota is doing crazy good stuff with their toyota tacoma cup truck that has taken market share from the silverado and the ford f-150. it is a difficult injury -- it is difficult industry and it is in transition. do i buy a car now or do i wait until electronic vehicles get the first generation out? that is the worst time to be in an industry, when it is in transition. sarah: you have what i do with the batteries and how do i do recycle that? another iteration of questions. alix: thanks and much to sarah hunt of alpine woods and art, thanks so much. trump called into fox and friends. he said the deal with china is close. g says he warned president not to send soldiers -- he warned president xi not to send

soldiers into hong kong. he says he does stand with hong kong but he is not sure if he will sign the bill congress passed because he also wants a trade deal. he is time hong kong and the trade deal together saying he wants a deal but does not know what he wants to do on hong kong even though he supports it. he says they're good chance he will be making a deal with china. coming up, we revisit materials price action one week after its result. we will tell you how you are set up next in today's technically speaking. if you're heading out and jumping in your car, soon to bloomberg radio on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: want to update the headlines. president trump speaking on fox and friends, saying there's a good chance we will get a trade deal with china, but he does say he does not want to sign the hong kong bill passed by

congress because he wants to get a trade deal done but he still supports the hong kong protesters. he is trying to thread a thin line. s&p futures up .2%, around the highs of the session. time for technically speaking. bill maloney, voice of bloomberg equity squad joins me to give you trades for your morning. you can listen to bill every day by typing in squa . what we wanted to do is give you one of the stocks we've been talking about and we will look at applied materials. bill: looking back applied materials. the stock fell 5.4% yesterday. we talked about the stock last friday after earnings. we said resistance will be at the high of march 2018 around 62. then it failed at that level around the last couple of days. this week. you can see it blowing up here and then we had the gap down yesterday. alana longer-term chart -- on a

longer-term chart, i will go back to my other chart. no, we do not want that. nordstrom. to if i look back here, stocks still in the long-term uptrend. holding the fibonacci level around 55. support level is 55. then down at 54, above those levels the stock is still in a strong position. alix: great perspective for that call last week. you just saw the nordstrom chart. bill: let's go back to nordstrom. alix: solid earnings. bill: stocks up 9% in the premarket. first resistance you want to look for is around 38. if you can get above there, then you can see this zone in here, which is basically around 44 to 49. that would be your next resistance level. alix: your last stock is ge. bill: it is interesting because they hit a new 52 week high. the stock has been somewhat left for dead, up 50% from the august

lows. we had a bit of a breakout in october of this month. 11:30 is now support on the stock -- 1130 is now support on the stock. retracement around 1236. alix: thanks a lot. bill maloney of bloomberg. that does it for bloomberg daybreak: americas. peter jp on "the open" keeney will be joining him. we are getting potentially positive trade lines from president trump. s&p futures only a .2%. 3111 is where we sit. happy friday. this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, and administration on repeat. the trade deal with china is "very close." europe on the edge of stagnation. pain beginning to hit services and white house fed pick judy shelton casting doubt on central-bank independence. with 30 minutes until the opening bell, here is your friday morning price action. equity futures advanced .2%. up on the session, down on the week. the week of losses after six straight week of gains. yields heading south, down two basis points to 176 on the 10 year. euro-dollar 1.1058. the year is not over just yet. >> everything is awesome right now. >> we fall in love every once in a while. >> low and contained inflation. >> a potential for bottoming in the economy in 2020. >> still constructive on 2020. >>