consensus on properly resolving relevant issues for phase one. powell's glass is half-full. fed chair jay powell says the u.s. economy's glass could fill up even more any policies could benefit all people. and $70 billion worth of m&a. we speak to kirkland's ceo after gold in one of the biggest mergers of this week. welcome to "bloomberg daybreak" on this tuesday, november 26. we had a record high yesterday, and now taking a little bit of a pause. s&p futures pretty much going nowhere. not a lot happening in the bond market. not a lot of movement in the commodity market. i feel at this is a theme going into a shortened holiday week, also headed into the end of the year and the month end squaring. frombuy numbers coming up

retail earnings over the next couple of days. third-quarter earnings better than estimated at $1.13. they see their full-year adjusted earnings raised from what they saw before on the $5.91.d, looking at . it looks like on first blush, a beat and a raise for the rest. global exchange -- for the rest of the year. time now for global exchange, where we bring you the news from all around the world. our bloomberg voices are underground with the latest. china and the u.s. agreed to stay in touch on remaining issues to get to a phase i trade deal after a phone call earlier, in which topic a shooters -- top negotiators from both sides discussed core concerns. they agreed to maintain communication on the remaining issues for the first phase of negotiation's. enda curran joins me from hong

kong. it is a long, convoluted way of saying they are still just talking? is all about the mood music. it is another day of incremental news that seems to be's adjusting that governments are on track for some kind of trade agreement. "the global times" had some extra detail on it. they said they may have spoken about tariff removals, agricultural purchases, and some kind of oversight as to how any trade agreement can be implement it. that is very important for the u.s. side of things in terms of how they want to enforce any agreement with china, and for the chinese side, removing paris is certain -- removing tariffs is certainly a red line for them. they are making the point that they are nudging towards some sort of consensus. they didn't give much more detail than that, but from here, the expectation will be how the o.s. response to this mo

-- this mood music out of beijing. it feels like there's a lot at play for the coming weeks. alix: good point. think you very much. we stay in hong kong, where chief executive carrie lam isn't offering any new concessions after pro-democracy forces won a landslide in local elections. m: the priority for us now is to properly follow up on actions proposed, including community dialogue. after these five or six months, hong kong people have realized very clearly that hong kong can no longer tolerate this chaotic situation. everybody wants to go back to their normal life, and this requires the concerted effort of everyone of us. alix: in the financial markets, alibaba had a blockbuster debut. . it raised more than $11 billion in a-shares sale, the biggest in

the city for nearly a decade. asia me is bloomberg's tech reporter. it was a surprising listing in the middle of the hong kong unrest. how did it do in its first day? reporter: it was off to a roaring start, raising about $11 as 7%n and rising as much in the market today. shares were oversubscribed multiple times, and the market has largely been surprisingly positive so far. given thee unexpected situation here in hong kong on the ground. alix: indeed, able to ipo in that environment. lulu chen, thanks a lot for that. i want to go to london, about two weeks before the u.k. elections. the ruling conservative party's lead is narrowing. joining us from london is bloomberg's charlotte ryan.

walk us through the details. charlotte: yes, in the u.k. at the moment we've really got policy paralysis until we get through this election what that means -- through this election. what that means is the pound is basically trading on the conservative chances of winning that vote. a little bit of this prize -- a little bit of a surprise in the most recent polls, a narrowing of support for the conservative party. minds backnvestors' we saw theen opposition labor party gaining ground throughout the election campaign, leading to the conservatives losing their majority. it is a bit too early to say whether we are headed for something similar, but i think a little bit of that narrative is coming through with those most recent polls, and it is something to keep an eye on through the remaining weeks of the campaign. alix: thank you very much.

in the u.s., another day for retail earnings. burlington, best buy out this morning. global me is bloomberg's business managing editor for the americas. best getting a nice -- best buy getting a nice pop here. reporter: yes, they beat for the third quarter and they are taking the guidance up for the fourth quarter. that's a little bit of a sigh of relief. in the last quarter, they took their guidance down and got hammered pretty hard by the street, so this is a good sign that into the off-season, they are a little more on track. any sign that they are getting traction is good. we also have burlington stores out already. burlington stores also beat, mostly in line on same-store sales, but they look strong in general. ladies apparel has been the question mark for them. it looks like they are continuing to make headway

there. we have dix sporting goods and dollar tree coming up later. confidentay powell is policymakers can extend the already record expansion in the u.s. "i see the glass as much more half-full. with the right policies, we can build on the games so far and spread the benefits more broadly to all americans." with me in new york is michael, bloomberg's international economics and policy correspondent. michael: jay powell telling us what we already know, the fed is on hold for an indefinite period as long as the incoming information about the economy remains broadly consistent with our outlook. same old, same old. but what's new, or at least, what he emphasized is new, keeping the expansion going has benefits beyond trading floors. low rates help spread the benefit of the expansion to the

economy more broadly, getting more marginally attached americans into the labor force and benefiting from jobs, including minorities, the handicapped, and the less educated. there's still plenty of room for building on those gains, as he pointed out,'s adjusting he's in no hurry to start raising rates, or what we used to call normalizing rates. he also emphasized the power elected officials could play, creating jobs through fiscal policies, training workers and getting them into the labor force. the one area he did emphasize where there might be some problems, inflation. not that it is too high, not that it is too low, but he did suggest the fed wants to make sure inflation continues to rise, and he thinks their rate cuts are going to do that. here's an interesting statement. look at the conclusion of his speech. nowetary policy is well-positioned to support a strong labor market and return inflation decisively to our

symmetric 2% objective." jay powell was a little bit stronger view of how inflation is going to develop over the next year. alix: thanks so much. here's another story the caught my eye. if you are driving for thanksgiving, this is your worst nightmare. get ready for heavier traffic than usual. the roads are going to be more crowded than they have been since 2005. here's one of the reasons, a strong economy. the other is that more drivers are going solo. almost 8% of american road travelers -- almost 18% of american road travelers are expected to trouble by themselves. gas prices have been falling since memorial day, averaging $2.56 a gallon. less gasoline, more traffic. awesome. coming up, mcmoore -- coming up, much more on your market trades and analysis in bloomberg first

take. this is bloomberg. ♪

alix: time for the bloomberg first take. joining me from our in-house team of wall street veterans and insiders, gina martin adams, , and alsognarella with us, peter tchir, academy securities head of microstrategy. i want to start off with -- of macro strategy. i would you start off with u.s.-china. with a roebuck of the tariffs, of yuan could have a period

appreciation. what do you think? vincent: i see where they are going with that. markets comeing the dollarybe fall off. but the limits to the downside and the upside, the pboc are raining met in. ining that in. it, it's fixed. it is within their band. you get a lot more out of another currency that you think can appreciate with the global growth story and perhaps an export country to china. hittingke the rial, an all-time low 15 seconds ago. gina: i agree, i think the dollar is a big question mark for 2020. should the dollar turn over, it will change a lot of dynamics in the equity market. europe is starting to catch up. canada is breaking out as well.

or firepoweromph in the emerging markets. if you did get some trade resolution, that is the primary reason right he -- that is the primary reason why the risk off tone has dominated. peter: we agree. we been looking for what we call a trade truce. we don't get an exciting deal. alix: so truce doesn't mean rollback. vincent: maybe we roll some --peter: maybe we roll some back. i don't think we will get any resolution until the end of q1 or maybe q2. we will get a truce that allows some of these emerging-market currencies to do better. alix: overnight, we got china selling $6 billion worth of dollar bonds. $17 billion worth of orders. trade problem? forget it. vincent: and a higher spread to treasuries than the prior. alix: by, like, 10 basis points.

vincent: no big deal. but people are searching for yields. wherever they are able to get it, they are going for it. we were talking about argentina bonds not too long ago. china looks brilliant compared to that trade. that's really what it's all about. treasuries traded through yesterday. we have another auction today. see this huge mountainous supply coming out of the u.s. and think, this has to be the end of it for yields because there is too much supply. gina: i think the reality is there's a lot of liquidity sloshing around. this is a very different year than 2017, 2016. global central banks at that point were restricting liquidity. this year, it has been about adding more liquidity to the market. the fed, the chinese central bank, the ecb. all of these banks are trying to relook what a, so -- are trying re-liquidate, so to speak.

it is a very different environment they we were in early this year, late last year. peter: i don't think we want to under race to meet -- want to underestimate the impact of passive. if people want to buy towards month end, china bonds will go into indices. i think we've been seeing a lot of the bond market, both in terms of where we are on the curve, what sort of bonds can get done, so i would not take that necessarily is a strong sign that there is a huge demand from investors. it's a big part of it. vincent: that's a really good point. yesterday, the divergence between not just the equity and bond market, but different risk asset classes, can probably be explained by that. it just didn't add up. treasury yields lower, dollar higher. emerging-market currencies lower. oil traded sideways, copper traded sideways. so the entire risk trade wasn't all there. alix: you can't just say it is

just trade. vincent: it was the proper risk on trade we see, where emerging-market currencies go up, gold traits higher. it just didn't add up. gina: maybe we are entering a point of greater divergence. we had that big risk on surge off of the august oversold levels. may be now we are normalizing and it is not all one single dimensional trade. that is not abnormal in history. it is just a different environment than we've been in. peter: it often does happen more around month-ends and year-ends. these are flows coming in that don't necessarily signal anything long-term term, so we are very careful right now. alix: so do you do nothing until monday if you are a trader? doncent: you probably won't too much over the holiday

weekend, but when you go into thanksgiving we can with a decent sized position, it is more luck than judgment how you come out of it. not too many bosses like you to get to frisky going into this. the flows are the flows at the month-end, quarter end. you can't control it. it is the classic, i was right, but i lost money. the flows overwhelm you. . that's not a place you want to be. alix: two things that are interesting, the first is the yield curve flattening. we took a little but of a pause. but really, we are back at 14 basis points. if you say it once up looking up what we saw in august, but the circumstances are really different. in august there was more negative news. we were looking more for the fed to cut in september. . now it looks like we might not see a cut it all this year, maybe one in 2020. are these different scenarios for you? peter: they are a little bit different. people are managing their equity portfolio in context with

their fixed income portfolio more and more. equities, by a bunch of -- buy a bunch of equities, buy a bunch of long dated bonds. alix: is a 60-40 portfolio going to work when you have lower returns for treasuries when yields are so low? peter: going forward, it might not. but i think people always chase what's been working, and this is the overall market sentiment. i think it will turn out fairly poorly this time. gina: it really depends on your longer-term outlook for inflation. if we get inflation spike into next year, depending upon where that comes from, obviously that treasury portion of your portfolio is going to not only act as a hedge, but act is downside relative to your equity upside.

i think most people are suggesting we are probably going to get reinvigorated growth, maybe a little improvement in the growth outlook, but no massive inflation. if it is goldilocks, that works. if not, you probably have a little bit of problem. vincent: i don't know that you will see inflation. it's really not there because we don't have the wages, but we are likely to see no tax cut next year. that will perhaps see this yield curve steepen once again. as to peter's point, this probably was a good trade for 2019. most likely not the best trade for 2020. so that hedge is probably going to hold back your returns. but you can see people getting out of that pretty quickly, and i think you will see a bit of a steepening for the curve next year more so than in this year. alix: mohamed el-erian had a good piece out. "the last thing the fed or any central bank wants is to be put in a lose lose situation. either accommodate markets by cutting rates, or resist

market pressures and risk a market selloff that could have adverse bill backs into the real economy." one other explanation for the flattening of the yield curve is the market trying to push the fed to cut again. what do you think of that? vincent: i think the fed is in a pretty good place right now. they have room to cut if they need. there's no reason to be looking at the other side of the going to hike. let this rate story play through. . let's see where the economy goes. if they need to cut because things start to roll over, they can easily do that. but to try to get ahead of it because the market is trying to tell them to do something which may not be the right thing to do, to me that would be a bad strategy. gina: i would say i totally agree. the fed is in a pretty good place, and not to mention, they've got bigger fish to fry with the balance sheet and the repo market into year-end. short-term interest rates seem to be in a pretty good position. we can argue about the 25 basis points, maybe another 25 or not, but that is a small argument

compared to six months ago. they've done a pretty good job managing the situation barring one issue, and that is that these quarter end environments, where you have a spike in repo, i think that is what they are focused on into year-end first, and then maybe we can get into normal operations. alix: and don't worry, we will talk about repos here. [laughter] alix:alix: thank you guys very much. peter tchir of academy securities will be sticking with me. any chart we use over the next two hours, go to gtv on the terminal. you can browse the charts, check them out, save them. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." more tension between management at google and the company's activist workers. google firing four employees for what it said are violations of its data security policy, but some supporters of the workers say organizing activities led to their dismissal.

some google staff protest the company's work with the military. they are also unhappy with its handling of executives accused of sexual harassment. shares of hewlett-packard enterprises lower in the premarket. sales falling short of estimates. that is a signal corporate demand for data center hardware is still stuck in a slump. hpe reaffirming its forecast for fiscal 2020 profit. in australia, a giant money-laundering scandal led to the downfall of a bank ceo. he quit under pressure from investors. he is accused of committing the biggest violation of money-laundering laws in australian history. that is your bloomberg business flash. alix: thank you so much. two other companies i'm watching, ford and tesla. it will be the f-150 versus the cybertruck for all-important bragging rights for pickup trucks. this began when tesla's elon musk sent out a video of his

truck beating the f-150 in a tug-of-war. ford came out and said it wasn't apples to apples. for instance, the f-150 appears to be a two wheel drive, while the tesla is an all-wheel-drive. they say they are ready to put on a fair contest, and elon musk says, "bring it on." there's room for everybody to play. we will keep you posted. coming up, the s&p hitting a high for the fourth time this year. will the rally continue into 2020? that's coming up next. this is bloomberg. ♪ ♪ here, it all starts with a simple...

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that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your local xfinity store today. alix: this is "bloomberg daybreak." 24 record high closes for the s&p, and last one was yesterday. now we take a little but of a break.

s&p futures unchanged on the day. european stocks pretty much go nowhere as well. and other asset classes, you had a pretty strong demand for the chinese $6 billion worth of debt. you also had an auction yesterday for the two-year that came in ok. $42 million of five-year coming later today. the curve still flat, 14, 15 basis points. we do have some more retail earnings reporting here. irst. go to dick's f they looked to be a nice beat on the bottom line. earnings coming at about $0.52 a share. on adjusted basis, they do pretty well as well. they see net sales for the whole year coming in on the high-end, about $23.7 billion. dollar tree also coming in with comp sales that matched estimates.

fitchso had abercrombie & rounding out here. comp sales zero. we were expecting 0.1% increase. they did miss on the bottom line, with only about 0.20 three cents of earnings -- with only about zero dollars $.23 -- with only about $0.23 earnings. do you care that optimism -- do you carry optimism into 2020 strategy? analysts are weighing in. > our outlook has gotten better. >> now that we are stabilizing, there's more positives within the stuff that matters to markets. >> the overall growth outlook for the global economy is relatively stable, but we don't share the near-term optimism of the imf. >> today we are sitting in a place where the risks are significant, and not reflected in the valuations. >> this downdraft is probably behind us. the economy is going to be a bit more sluggish. earnings are going to be weak

-ish. >> equities will be in underperformer. >> we are still going to be locked in a trade war with tariffs, which potentially means higher yield and an economy that is slower. . what is bothering me is i don't necessarily see this big re-acceleration. >> stocks are going to do really well on weaker growth, and we are all going to be left scratching our head. >> we debate when the end of the cycle is coming, how long it is going to last. honestly, that is a depressing thought to me. alix: still with me, peter tchir of academy securities. diva agree that the melt up on mediocre news continues? peter: i actually think we are going to get surprisingly good news. i think we get trade resolution. i think europe is going to kick in with fiscal stimulus. it is going to come down to lagarde getting something accomplished. alix: is that going to be real substantial growth? you seem value start to outperform, but in the u.s., the

weak balance sheet sectors are doing better. in europe, we still have a strong balance sheet to rally. how do you parse it? peter: i think you see better growth across the board that is not priced in. in the u.s., i think you see more of this continuing rotation where the laggards and underperformers can do better because not enough is priced in. some of the safety stocks that people are flocking to make you a little bit worse. i think bond yields go slightly higher. i think we see steeper yield curves. the u.s. treasury department is going to issue long dated bonds next year, maybe shift some of our issuance. i think 20 year and 30 year, but even so, right now we are issuing too many t-bills relative to long bond. i think we are going to see a very different dynamic, and i am actually positive on growth, more in europe. i think 20/20 elections are going to slow us down here. alix: i would u.s. more about the issuance. into whathat all wrap the fed is trying to do in the

repo market? peter: traditionally come our balance sheet has been about 14%, 15% t-bills. , and now it is 20% t-bills inordinately large amount. i think you will see the treasury department say steeper yield curves are better for us, plus, let's lock in some long dated deals. every corporation is doing that. when you look at some of the indices of the bloomberg corporate index, average from just over nine years to 11. alix: how does that wind up trickling back to the fed and the repo market, in terms of the dollar funding crunch? peter: they would be issuing fewer t-bills, which would be product the prep -- which has been part of the problem. i think the balance was that too many t-bills were coming from the treasury, not enough support from the fed. i think that is going to anchor the front end and let login yield's rise a little bit -- let long and yields rise a little

bit. alix: so why do you like europe? peter: i think everyone hates europe a little too much. european banks are in a good position to benefit from that. lagarde, basically, as i have seen that's, -- i have seen this, draghi laid the ground for fiscal policy. she's much more of a politician that a monetary policy person. i think she will use the bully pulpit. she is france's choice to be on that. france needs stimulus as bad as france and italy. germany will eventually cave. we are looking for green energy, things that europe will get behind. alix: where do you see value? we are seeing analysts come out now and say they do like europe. saying itldman sachs is one of their favorite traits for next year. you've got cyclicals. peter: i think you are going to find companies that, banks always do well.

if we are right on uric duma well -- right on europe doing well, emerging markets will be interesting next year. i do want to get your take on the m&a we saw yesterday, about $70 billion worth. do. you see that continuing in europe and the u.s.? is it a big driver of animal spirits? peter: i think it is going to continue. our view is that more and more of the world will become bbb in terms of the credit quality. i think every a company is realing that spread differential is not enough. these companies are using m&a activity, doing some large stock buyback programs, and why not? there's no big penalty for moving down to bbb, and there's a lot of growth opportunity. i think you are seeing companies be really selective, and it is going to continue. alix: so what happens if there is a credit rating, i downturn? does that were you at all? peter: not at all.

people don't need to be single a anymore, so they are moving down. at the same time, they really don't want to be bb's. ge, budweiserar, ran into trouble. they really cleaned up. at&t was a great example. the cleaned up their balance sheets. on're now seeing them equities. companiesse weaker have solidified their balance sheets because they had room. bbb's are going to be pretty good. they got a lot of leverage they can pull. i think that's going to be an ongoing theme, that weaker bbb companies can quickly repair their balance sheet, and that is what the market missed last year. alix: hang tight, because we are going to get more on emerging markets. peter tchir of academy securities is going to stick with me. we want to get an update on what is happening outside the business world. viviana hurtado is here with first word news.

says the twoing sides of the trade deal have reached consensus on properly resolving relevant issues. still, the last comment from president donald trump have led to speculation that talks could last into next year. federal reserve chairman jerome powell says the u.s. economy's glass is more than half full. he predicts, with the right policies, the but if it can spread more broadly to all americans. at the same time, powell signaling that interest rates would probably remain on hold. in the first half of the year, mexico had a slight recession. from the end of 2018 through the second quarter, the economy shrank 0.1%. for the year, analysts say mexico's gdp will grow the least since 2009. the problems include low oil output, slumping construction, and services activity. 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: thanks so much. you mentioned em. of unrestession, tons cropping up in latin america. what do you like? peter: i think globally, there's going to be a resurgence in global growth, global trade. that should lift all boats a little bit. for mexico, we need to see the usmca signed. that would be a big help. turkey is a country we remain very nervous on. academy securities has 13 retired generals and admirals on our advisory board. we see the ongoing shift away from the west, and that is, i think, a long-term concern. if i'm looking for an area that could be problematic, turkey is one because they have issued so much debt at the sovereign level , and foreignlevel denominated currency in euro predominantly, so that could be trouble. i think european markets as a whole will be doing well. narratives see two playing out.

one is that there's so much unrest, how do you own these things? chile, peru, ecuador, not to mention the fact that in asia x na, the- in asia ex-chi u.s. might be looking at that. peter: the middle east is very tenuous at best. what's really fallen off the radar screen i think is iraq is very problematic. everyone is talking about a ron, but iraq has a lot of -- about a iran, but iraq has a lot of irani and influence. you got to be careful. alix: do you like latin america better? is it a southeast asia story? peter: i like latin america. i think we are relatively comfortable. venezuela has been a little's

appointing. we thought there would be some more resolution -- a little disappointing. we thought there would be some more resolution from the current government. alix: what do you make of all that? when you have the unrest from hong kong to latin america, all of the areas in the middle east, when you look at a further out forecast, how do you interpret that? one of the issues is the u.s. has allowed other countries a lot more influence across the globe, so i think that continues, unfortunately. you see this unrest, you see people playing things out, and you've got to be very cautious about that. instead, i think big global growth is going to be the biggest driver. alix: peter, always good to catch up with you. peter tchir of academy securities, thank you very much. coming up, $700 billion opportunity loss. that is how much financial firms are leaving on the table by ignoring women. we have much more with element -- with elizabeth almagro, oliver wyman -- with elizabeth partner ofiver wyman

financial services. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." we begin with dell. the company is exporting the sale of its cybersecurity business. dell hopes it could get at least $1 billion for rsa security. the company acquired rsa and a 2016 takeover. mark zuckerberg completing what he calls his personal challenge for 2019, a sort of new year's resolution. . he pledged to hold a series of

discussions about the future of technology in society. the problem? almost all of zuckerberg's discussions were with fellow white men. . they've always dominated the tech industry. no word what his 2020 personal challenge will be. saudi arabia's neighbors are coming through for aramco. abu dhabi will put as much is $1.5 billion into aramco's ipo. the saudis are counting on their gulf allies to prop up investors. alix: thank you so much. we turn now to women of wall street, where we highlight the women creating and shaping the world of finance. $700 million is how much money is left on the table by the financial industry for failing to listen or tailor products for women. this is according to research by oliver wyman. many financial products that appear agenda -- that appear gender-neutral are anything but. ,utting me is elizabeth st-onge

financial services partner for our zoeller wyman -- financial services partner for oliver wyman. elizabeth: we spoke to hundreds of executives in the industry, and we've been doing this research for many years. our data goes all the way back to 2003. we have a really good set of data through which we can see the progress made in the industry. alix: some of it is really about not only products to women, like with insurance companies, but also with credit cards. there's significant money losses for companies that don't cater products to women. elizabeth: correct. this was the first time we looked at financial services and their customers as women. at first, the report looked at the workforce and how women are progressing through financial services as their employer. this year, we decided to take a broader lens and look at financial services' relationsh customers,men as

employees, shareholders, and even community members. a real panoramic view of the full relationship in financial services with women. alix: i went into start on the products. there's a reason for that, right? we are living longer. women are making more money, etc. front?d you find on that how much money do we have to put into these products? elizabeth: what we found is that the industry is systematically under serving women and not meeting their needs. there's a huge opportunity, as we mentioned earlier. 700 billion dollars in potential revenue profit per year available if these firms better served women. by the way, we are not talking about pink marketing or superficial targeting. these are actual, legitimate differences in the lives of women, structural differences. they live longer. they are more likely to be's heads of household. they tend to be -- to be single heads of household. they tend to be providing caregiving for their family. those lead to different needs

for financial services. total.700 billion is the . a huge chunk of that comes from insurance. what about the others? elizabeth: we find that across the full financial services spectrum. insurance is one of them. we founded in retail banking, where women are far less likely to be approved for mortgages or personal loans. we found it in wealth management. women are making more money. they have more wealth to invest, but they are underserved. we found it in small businesses and entrepreneurs. women are less likely to get funding. even in the corporate space, where female cfos and treasurers or professionals buy on behalf of their companies, we went into it assuming there probably wasn't a difference there, but these women reported that they felt underserved and overlooked. alix: tell me about that. elizabeth: it was really interesting. we went into it thinking there is not going to be a difference. these are corporate buyers.

they are professionals buying the best products and services for their corporation, whether they are men and women. but these women said they are not being served appropriately. they do not have diverse teams covering them. banks often overlook the or talk down to them or talk around them. corporate banking is very relationship based. a lot of the events cater more towards male preferences, and these women are just not interested in that. alix: yesterday, there was a report in the journal of organization science that says if you appoint a female director at the company, then two years of stock declines come after that. then you have reports that say there's not a business case for it, and actually it could harm you. how does that square with your research? elizabeth: it is really interesting to think about that. it is all about causation or correlation. no studies have shown as a matter of fact, if you have more women on the board or in senior leadership, that will lead to

better returns or financial returns. having said that, a lot of research shows that diverse teams are more effective. they are more resilient. there's less groupthink. they are able to serve customers or broadly. because of that, we are starting to see a lot more interest in regulators, supervisors focused on this, thinking it is better for the industry. recognition that diverse teams are just better. alix: is there one company or one thing a company did that worked really well? elizabeth: when we see firms that do this well, there's two things they have in common. one is diversity and inclusion is not something they do on the side. it is core to their business, to their purpose, to their brand, and to their strategy. like every other important business strategic initiative, it is tracked, it is measured, and leaders are held accountable. the other thing to do really well or have in common is a

recognition that it also requires cultural change. you can have programs and structures to bring more diversity into your firm, but to take advantage of diversity, you need inclusion. you need people to have a sense of belonging, to be heard, to have a voice, to be valued. that requires changing the values and behaviors and beliefs of everyone in the organization. so it is not just programs. it is culture. alix: elizabeth, thank you so much. elizabeth st-onge of oliver wyman. in today's off the beaten street, how goldman sachs is taking diversity and inclusion measures a step further by issuing guidelines on gender pronouns. a goldman memo dusted common masculine, feminine, and gender neutral pronouns, and advised never to assume a person's pronouns. the bank says using a person's preferred pronoun shows respect. no doubt a big shout out there to --, who transitioned last year. if you are jumping into your

car, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

for trader's take. joining me is vincent cignarella , voice of the bloomberg audio squawk. you mentioned the 30 year and the tenure -- and the 10 year. vincent: this relationship is been around for a long time. this is the copper over gold trying to replicate this. basically, as that ratio climes, risk is climbing, and you would expect the 10 year yield to follow. a little bit of divergence coming into this year, and i expect that to come together again. the feeling is that the risk move going into next year is a little better, so my guess is we should see 10-year gilts trade higher. alix: this also goes back to

what you were saying earlier in the program, that you can't trust things going into year end. vincent: the flows can be really erratic. you will get corporates at the end of the year saying, literally, i forgot. i have to buy 500 million euros. something insane you have to hedge, that we just forgot we didn't do it. it has nothing to do with reality as we know it. it is some plea that year-end, last-minute hedging that has to take place, that has to be put on the books. . it throws all of these relationship's off. but you can go back to this, i think, in january. alix:alix: awesome stuff. thank you very much. nuveenup, bob doll, equity strategist, will be joining us. this is bloomberg. ♪ this is bloomberg. ♪

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

november 26. i'm alix steel. here's every thing you need to know at this hour. let's take it from the top. of lam: the small number people still holding out inside the polytech u campus should leave. alix: carrie lam makes no move to cave to protesters after a more than 60% swing to pro-democracy candidates in the local elections. alibaba comes up strong. >> we are ready, hong kong. we are coming. >> alibaba was off to a roaring start, raising about $11 billion. alix:alix: jumping more than 6% in its hong kong trading debut. it is another day for retail earnings. dollar tree cuts its earnings forecast, while dick's and best buy raise for the holidays.

>> it is a bit of a sigh of relief. last quarter they took their guidance down. they got hammered pretty hard by the street. this is a good sign headed into the holiday season. . they feel like they are more back on track. alix: happy tuesday, everybody. not a lot of action in the markets. 24th record high yesterday for the s&p, and now futures but he and nowng nowhere -- futures pre-much going nowhere. currency markets quiet, rates market quiet. crude getting a bit of a boost. joining me for the hour is michael mckee, bloomberg international economics and correspondence he -- and policy correspondent. at the break, i said, what do you like? he said the lack of reaction. michael:michael: it is the curious case of a dog in the nighttime. alix: seriously. michael: basically, we've got another set of what the market has considered good headlines on china trade. nothing happens. maybe investors are finally

getting wise to the idea that you don't react to every headline. the idea that, gee, they had a phone call, doesn't mean we have a deal necessarily anytime soon. alix: but if we get a negative headline, that is just as nebulous, and means we don't get a selloff. taylor: well -- michael: well, let's hope that's the case. [laughter] michael: and dare i say the f word, fundamentals? alix: no, definitely not. in beijing are in touch with the u.s. for a phase i deal. according to data from the cbc world trade monitor, global trade volumes dropped in september, a huge portion due to u.s. and china. u.s. import volumes down over 2%, and china almost 7%. oll,ing us is bob d

chief equity strategist for nuveen. bob: there's no question the absence of disagreeing, if we can come to a truce and say we agree to disagree, just bring the temperature down. that's good news. then we get back to fundamentals. i'm with mike. michael: i like that. alix:alix: that's something you never hear -- alix: that's something you never hear. [laughter] michael: then the question becomes, what do the fundamentals look like? alix: exactly. bob: the path of least resistance is still up. the pub ability of a hard brexit, the pmi's and manufacturing numbers getting a little better. that has given us a nice rally in the market. happens to earnings next year? the good news would be last year, the fed tightens, we have ish economy this year.

this year, the fed eases, we have a good economy next year. michael: is that just cockeyed optimism? what is the idea that we go from either a negative or just barely break even quarter to all of a sudden double-digit gain? alix: better comps, maybe? bob: easier comps, better economic news. maybe better news from overseas, easier trade tensions. i think a lot of ways have to come on the right side. if get anything on the wrong side, we won't make 10%. alix: the recent rally led by biotech, and the russell leading the s&p. do you sell that? are you buying it? bob: no. not yet, anyway. after labor day, we had a momentum collapse, and value

moved higher. that was the shot across the bow. since then, small, value, cyclicals, international have been the place to be, the exact opposite of the first eight months of this year. i don't think that rotation is overcome a the strength of the economy is what is necessary to see if that trade continues. for now, i am still in that trade. michael: jay powell last night talking about a 2% economy next year. does that justify double-digit earnings? bob: i think it is hard. if gdp is 2%, the only way you get to 10% earnings in my view is profit margins have to move up a little bit. if anything, i think profit margins are going to move down a little bit. labor costs alone are starting to eat away in some places. michael: dollar tree this morning said that there margins are shrinking because of tariffs and labor costs. alix: or is that going to be the whole, it's cold out? bob: i thick there's legitimacy. alix: ok. bob: we talked to a lot of ceos,

and the common refrain these days is i can't find workers. it used to be i can't find skilled workers. michael: that's always been the question. when do they start raising pay? bob: i think some of that is on.g . if you are reasonably content where you are working, it is going to take a higher paycheck or something to get you into the new place that need someone like you. alix: heaven w -- haven't we been talking about peak margins for years? bob: that's a fair point. having said that, margins are down this year. earnings growth has lagged revenue growth by about 5% this year. michael: you've got to wonder, we are obviously talking about the so-called wall of worry that wall street loves. but is it a little bit different? when i look at what the political mood is in the country, dismal, obviously, we

are looking at europe's outlook bad, members of the ecb counsel saying we are going to be stimulating for a long time overnight, china's growth forecast to go below 6%, is there a different quality to the gloom? or is this what we like to see? [laughter] bob: somebody asked me not to long ago, what is the best gdp growth rate for the stock market? i said 2%. i thought you were going to say 3%. don't give me 3%, because then we get overheating and inflation to the end of the cycle. if we have 2%, we can grow forever, like australia, 28 years. alix: you are still in that value-rotation trade. does it apply overseas as well? obviously there is a cap between europe, asia, and the u.s.. between is a gap europe, asia, and the u.s. what do you think?

bob: we know when economic growth gets a little better, and that is the premise behind this rotation, non-us tends to do better than the u.s. u.s. is the most defensive market on the planet. u.s. has done well for how many years in a row now? we get a little bit better growth. the problem is, are people looking for too much better growth? only time will tell. michael: at this point, it doesn't look like anybody is overly enthusiastic about where the economy is going. jay powell, though, mentioned concerns about where inflation is going. obviously that is going to hit your multiples. where do you think it is going? if you are seeing companies raise wages, does that give you more concerned about where prices go? bob: it does. if inflation changes, i don't think it is lower. and labor is one of the big issues. somebody said recently, terribly -- somebody said recently, tell me where there is inflation

going on. labor is one of the only places you see it. 3%-ish.pt up to if you get to 3.5%, the fed gets nervous. alix: do you have to find a trade for these low inflation expectations? bob: i wouldn't go there yet. i would lean to lower quality balance sheets, other more cyclical. i am not saying deep cyclicals require pricing power. we are not there yet. it is elected technologies, consumer names, some industrial names. i don't think you have to go to energy and materials in a big way. michael: i'm the eco guy. i've got to ask, does this mean the fed stays on hold through 2020, not going up or down? bob: i think that is very possible. they lowered rates three times, lowered the bar -- raise the bar for further cuts.

i hope that's the case. if not, earnings are going to dissipate. we won't get close to 10% earnings growth. but for them to raise rates, it's going to take a long time. alix: i just don't see how we ever get out of that situation. bob: maybe we don't. australia, 28 years. let's keep it going. [laughter] michael: exactly. i think i can. bob doll of nuveen is sticking with michael and i. coming up, we break down the fed chair's upbeat speech, the glass half-full. this is bloomberg. ♪

alix: we were just talking about

powell seeing the glass as half-full. the fed chair said, "i see the -- i seemuch more than the glass as much more half-full." still with us, bob doll of nuveen. i find that interesting in relation to kashkari talking about how the fed can help everybody. i wonder if the rhetoric is lower forever, now that the fed takes was possibly for everyone as a mandate. bob: it would be nice if they could solve all of the problems for everyone, wouldn't it? i'm not sure, since they have one blunt instrument. if inflation stays low, the fed can stay where they are for a long time, and interest rates can, too. michael: it seems to me a change in emphasis from the fed about why they are doing this. spread the benefits, not just keep the expansion going. spread the benefits to everyone.

the market seems to be buying this as we are ok with what you're doing. bob: i think that's right. if the fed can stay quiet and off to the side and be benign, the market will applaud them and that will be fine. you've seen the numbers that show that down wage rates are picking up faster than higher wage rates, and the fed will take a bow at some point in time to say, hey, we fixed it. but there are lots of other issues, too. inflation is not going to stay quiet forever. you can have an unemployment rate that is approaching zero -- you can't have a nun and plummet rate that is approaching zero inflation problems. michael: for the markets, it is liquidity season starting. this time last year, the fed wanted to stay quiet and got dragged, kicking and screaming, back into the market. so how long do we go?

bob: maybe too long, having learned what they did last year. my guess is they are going to sit on their hands as long as they can, even if they are forced to go. let's hope we don't have that problem, but we could get there. alix: that really echoes what muhammad ali area said in a bloomberg opinion piece -- what muhammad ali area -- what mohamed el-erian said in a bloomberg opinion piece today. "risking a stock market selloff could have a real pullback on the economy." that's a sickly what we've been talking about. bob: that's right. part of the reason the fed lowered rates was the problems overseas. if overseas gets less bad, which it is, and if the fed stays at low rates, and if the money supply is growing at a faster pace than we have seen in some time, liquid the environment for the financial markets, does that

get inflation from one point something to to point something? -- to two point something? michael: the fed, in its longer-term repo operations, are we going to see the same kind of backup this december that we saw last december? bob: i suspect we will for that reason, as well as economic growth is a little better and inflation is not going down anymore. should the 10 year yield b 1.75% 1.75%?ear yield be i think the whole global interest rate structure will move up some. still in a low interest rate world, but 80% handle on the 10 year treasury i think is likely before too long. alix: obviously, decent chunk of the fed feeling good is because of the u.s. consumer, right? we get mixed retail numbers. how do you look at consumer discretionary, for example, in the retail space? bob: mixed, as you pointed out.

the farther away from the mall and apparel, the better you are doing. if you are in the ball with apparel, god help you -- in the mall with apparel, god help you. good companies producing in a tough environment, reasonably well. but then you go back last week and you had the gap problem. apparel and malls. no surprise. michael: let's get a forecast from you on the retail side for this holiday season. by the way, bob will explain to the young people what a mall is a little later. [laughter] speakit's where you go to in new jersey, and to an amusement park. michael: fourth quarter last year, retail sales dropped off. nobody bought. are you favoring retailers this year? is it going to be a different story? bob: we are underweight retailers.

if it isget there, but different, i think it is a low bit lower. alix: how would you then be playing the consumer if you don't feel like it is going to be retail names? what is the trade that still has value? bob: within retailers, stay away from the mall and apparel. there are plenty of good names. best buy was one example. storyme depot/lowe's isn't over. target and walmart had good numbers. alix: bob doll is going to be sticking with us with his thoughts on the tech sector. that's next. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." for a u.k., bp is looking new broadband supplier to reduce its reliance on huawei. -- weerg has learned

would like to correct an earlier version of that story. we stated huawei has a 60% market share in u.k. fiber components. the actual market share is 44%. shares of best buy higher in premarket. the electronics chain is entering the holiday season with momentum. quarterly sales beating estimates, raising its outlook for the full year. more tension between management at google and the company's activist workers. google firing four employees for what it says are violations of its data security policies, but some supporters of the workers say organizing activities led to their dismissal. some google staff protest the company's involvement with the military and the handling of executives accused of sexual harassment. that is your bloomberg business flash. alix: thanks so muchalix:. what did you make of that story? does this mean that google is for sure now a mature tech company? michael: they have been for a long time.

alix: but i feel at this heralds something, when you have your workers so disgruntled. there's protests, people fired. michael: i think what it is, we live in a world where everything happens online and everyone knows about it. this is the sort of thing where workers get fired and accuse companies of retaliation for labor market moves. it's been going on forever. i am not making a case whether the company is right or wrong here, but i'm not sure that it tells us a whole lot about google other than that they are, as you say, immature company that goes through the same problems that every large, mature company go through. the problem is we all go back to the founding statement, "don't be evil." alix: right. michael: they are like everybody else now. evil is in the eye of the beholder. alix: bob, how do you view it when i given to half ago, we were buying google stock and facebook, and now they are these

big companies that could be regulated or broken up, and employees are mad at what the ceos are doing? what do you make of it? bob: i echo mike's statement that we are all living more public lives. that is only going to continue. in terms of the stocks, it is just going to remain in overhang, which is pressure on the multiples side. companies are good. they have good business models, earnings growth good. but i don't expect pes to go up. alix: how can you not buy them here? what do you do? bob: they are a lot cheaper than they were 18 months ago, relative to their earnings, etc. i think an adjustment has been made with this overhang that didn't exist a couple of years ago. michael: is a bit of political analysis, the idea that washington is not going to do a whole that next year because it is an election year would be a fair statement. but you come to 2021, there's been so much talk of regulating the big tech giants.

is any of that starting to get into the price, or is it we are going to ride this and worry about that after we see who wins the election? bob: i think the possibility has entered the stock price, but actual legislation, i don't think it's in the stoxx. i think it's -- actual legislation i don't think is in the stocks. i think it could be a motivation, but that is going to take some time. alix: europe is already cracking down. you could go the whole year and a half with nothing happening in the u.s., and europe is still going after them. michael:michael: you look back at what happened in europe with the data privacy rules. why wouldn't we have that here, necessarily? bob: we certainly could come about we are not the same as europe. we try to be independent and the politics of it all. i think it will be a lot of

talk, but not a lot done. alix: what do you like in tech? bob: i like some of the software companies that have pulled back. microsoft and apple, the stocks have done so well, but they are still not that expensive. microsoft has moved up. apple, in my view, is still pretty cheap. i will own a value name here and there. the hp/xerox battle back and forth, both of those are pretty cheap stocks. would love to see something beneficial happen to both stocks. michael: what happens to apple? i have an -- alix: iphone five. [laughter] michael: hinting for christmas? that market cap keeps going up, except that everyone says it is underpriced. bob: well, it certainly was harder to make that case now, but the earnings growth is still good. they have an amazing mount of

cash and cash flow. part of the reason the multiples are not higher, what are they going to do with the cash? but i think apple will keep cranking it out. the china question mark is always there, putting a lid on things come about apple is ubiquitous. michael: except it. -- michael: accept it. alix: well, now it is a metal or -- now it is a matter of pride. michael: there are still people here using but berries -- using blackberries. alix: really? i have not seen that. we are going to speak to paschal donohoe, ireland's minister of finance. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. the 24th record closed s&p yesterday at we are trying to go somewhere today. maybe we will pride higher,

maybe not. not a lot of movement in the equity market. the 2-10 spread continues to stay flat. 14 or 15 basis points is where we are treading. the cable rate seeing action in the g10 space. waiting for the data to drop. retail inventories. for october, retail inventories up .3% and wholesale inventories have a nice job -- have a nice jump, .2%. a huge change from what was on september where we have also inventories down .4%. the advanced goods trade balance narrows, -66 and a half billion dollars -- -$66.5 billion. i want to point out revisions to the wholesale number for september revised down to .7%. that is interesting as well as we wonder how much that feeds into trade.

is that the inventory rebuilding we've been wanting to see? --hael: inventory d stopping destocking. a lot of stuff was brought into the u.s., so you are seeing this totocking as retailers try get rid of what they bought. the question is is it going to be too low? retailers were set up for a discounting holiday season because they have a lot of supplies. maybe they have less than they thought. it is hard to tell from one month's numbers. trade balance numbers are good. that is better for the economy, these are october numbers for the first month of the quarter. it portends better growth. do not have the breakdown for imports and exports yet, but an error trade balance is a benefit -- but a narrower trade balance is a benefit. alix: weren't we were supposed

to have better exports and better inventories helping gdp? were we supposed to see inventory rebuild in a good way? they were going to fund a lot of the growth and by ahead of the tariffs? to tell it is hard because of the timing of these things. we did see the president take off the october tariffs. we are waiting to see what he does with the december tariffs. that is what he did after the christmas buying season. whatever's in the warehouses is in the warehouses. will not make a big difference what he does on tariffs. you do not want anything in october in january. alix: i do because i want a sale. now we will get an update on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: china and the u.s. inching their way forward on a trade deal. beijing says the two sides have reached consensus on resolving the issues. the lack of a deadline and

comments from president trump's have led to speculation the talks could last into next year. the house intelligence committee will release its impeachment report. adam schiff says there is still the possibility of additional hearings or closed-door depositions. the next step would be for the judiciary committee to send impeachment charges to the house for a vote. over to the u.k. it is just what lay be leader jeremy corbyn does not need. today the party launching a manifesto just hours after the u.s. -- after the u.k. chief rabbi attacked jeremy corbyn's record for dealing with anti-semitism in the party. is a insists jeremy corbyn lifelong campaigner against anti-semitism. 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: we are about two weeks away from the u.k. elections. the pound dropping as paul's

s show the poll conservative party leaders dropping. paschal donohoe joins us from berlin. great to talk to you. what is your estimation of what happens next 12 months. do you think a free-trade agreement is realistic by the end of next year? >> it is a very demanding time to have such -- the european ambitious andl be we will look to get the work completed as soon as possible. in terms of the phasing of all of this, it will be whether the withdrawal agreement is passed by january 31, and that will depend on who has a majority in the house of commons. the next phase will be whether a extension of the transition period was required. the deadline of that is expected by the summer with the current

deadline the end of next year. there -- i believe the eu will be ambitious. get away fromnnot brexit when we talk to you, although you are not on the others of the irish sea. you have to wonder do we have a workable border agreement from the irish point of view in the brexit document the british parliament passed? minister donohoe: yes we do. that a unique agreement recognizes the unique circumstances on the island of ireland and the british government and the irish government and the european union have plate and imaginative role and looking to come up with an agreement to prevent the development of a hard border on the island of ireland. i believe the agreement that has been reached between the eu and the u.k. does deliver an insurance policy.

i hope it is not needed. i hope we can reach a trade agreement and a future political agreement. that means the insurance plan is not triggered, but if it is triggered, it will work. all kinds ofet commentary in the united states about what all of this might mean. the idea that the british may cause a problem with the border has raised, as far as we hear, the odds of a united ireland. does it play that way over there? the idea that the united kingdom breaking up and maybe the two halves of ireland uniting again? minister donohoe: we are many phases away from something like that happening. the good friday agreement is very clear that there would have agreementssibility of border polld -- the

would look at northern ireland as part of a broader ireland. the view of the irish government is the timing is not right for a would be that, it counterproductive. what we now have to do is all work hard to see if we can come up with a new agreement, a closer relationship between the u.k. and the eu? that is where the majority of our interests need to go for the foreseeable future. we have a strong insurance policy that has been negotiated between the eu and the u.k.. we want to avoid that insurance policy being triggered, reengage with communities of northern ireland, and see the institutions of northern ireland . get that up and running all over again. it has not been in place for three years and our focus is on getting those institutions in place. alix: one of the reasons you're in berlin is because you will be

meeting with christine lagarde tomorrow. the rhetoric from her is that it is all about fiscal stimulus. do you think island of the rest of europe should be engaging in fiscal stimulus? minister donohoe: ireland is already playing a big part in how we can increase capital investment in our own economy. we have increased capital investment in our economy by 60% -- by 90% versus where we were in 2016. we have gone from 4 billion euros to now just over 8 billion euros. we are playing our part. as to whether the next of your needs to go in a similar profile -- my other finance minister colleagues side. we need to look at how we can invest more into europe's future. clearly now, some of the effects of low interest rates are beginning to cause concerns in relation to could expenditure to

more, should fiscal policy be more activist? in ireland we are always playing our part. my ambition is how we can grow our surplus after many years of being investors. michael: the european parliament tomorrow is supposed to confirm the new members of the eu commission. what you expect? how will things change, if at all? i think wenohoe: will see significant changes under the new president. there are three in particular i think will be important to the future of europe. the first one is the new president is looking to put in have aonference to discussion over a period of time regarding the future role of europe regarding how all of the member states of the european union engage with each other. the secondary i think would be important, and i expect to see week is as soon as next

accelerated progress toward banking union, try to come up with a roadmap to a deposit scheme, to an insurance scheme for deposit, and using that as a building block toward the completion of banking unions. this is a vulnerability at the inside our currency unit at the moment and i believe more progress will be made on that. finally, i think there's a big debate on the way in relation to future industrial policy for the european union and how we should be championing the development of more large european companies. there are lots of use of that in europe and you will see a lively debate. alix: i want to end with something closer to home. have you considered whether to restore bonuses for buildout irish banks? anister donohoe: this is issue i keep under review all the time. it is something the department

hasinance in ireland assessed at varying points. for now my focus is how we can bring in an approved accountability machine for individual bankers. this is appropriate given all of the additional regulations you see implemented, and it is also appropriate given the consequences many of our banking difficulties. that is where my focus is at the moment. that seems like no, not right now. minister donohoe: we are keeping it under review. --focus is how we will alix: thank you very much. paschal donohoe, finance minister of island. thank you. bob doll is still with us. how do you view the stimulus, brexit? bob: call me the ugly american. my view is this is a lot about legalese and procedural issues. the u.k. in europe need each

other and they will find ways to trade. i's and cross the the t's is important, but they will find ways to do it. given all the noise inside the u.k., there are issues there, but i think we will get through this. you've seen the u.k. economy start to perform badly as brexit brexit gets closer and closer. still worth investing? rather be on the continent. non-us will do better because the globe is doing better, europe will play a role. we have seen a big rally in japan. europe could follow. they need fiscal stimulus. all of europe needs to consider that if they have a chance of growing. they have an undercapitalized banking system, and that is a

problem, not to mention the problem with the structure of the euro. does not hang together. alix: great to catch up with you. bob doll, happy thanksgiving to you. coming up, i'm not so golden merger. more on consolidation among gold miners with tony makuch. users on the bloomberg terminal want any charts we used throughout the two hours, gtv on the terminal. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." i am viviana hurtado with your bloomberg business flash. shares of hewlett-packard are

lower in the premarket. demand for data center hardwire is still stuck in a slump. hp reaffirming its forecast for fiscal 2020 profit. dell is exploring a sale of its cybersecurity business. bloomberg has learned dell hopes up get at least $1 billion for security. the company acquired rfa in a takeover. that is your bloomberg business flash. alix: time for bottom line. we look at three companies worth watching this morning. i am looking at chesapeake, getting a approval rating. one analyst likes their debt reduction plan. it is realistic to reduce their leverage ratio. i cannot believe they are trading at $.61, that is crazy for a company as big as chesapeake was. sic semper gloria, as they used to say in rome.

share $1.70 to $1.80. the stock is reacting as you would expect, down 13% in premarket trading. there is still value, but the reason is what is interesting. sectionany estimates 301 tariffs will increased its cost of goods sold by $19 million. they are saying tariffs are hurting their bottom line. they are also talking about wage pressures and that is something we were talking with bob doll about. alix: the third company is kirkland lake lowball, the company announcing a $3.7 billion deal. tony makuch, kirkland lake gold ceo joins us now.

thanks for joining us. we had a chart up for stocks over the last day. it feels like what investors and analysts are worried about is the increasing cash. you have low cash costs. no matter how many efficiencies you can ring out, you are still looking at higher costs. what is the street not understanding? tony: there a couple of things special. it is a large deposit with a lot of my life. both significant expansion in expending the open pit and increasing production, which will lower cost, and on top of that there is the expiration on topal dad new ounces of that. that combined will lower costs. thereher part of what is is the volume of the margins. looking at from a total dollar point of view. even of value created

though the costs come up higher. ounce,ither way, $562 an that has to come up. costs down,detour but yours have to go up. minister donohoe: maybe -- tony: may be in the long term two up, but when you increase the amount of -- the amount of the margin goes up. we see generating seem to be at cash. michael: how quickly can you get the recovery of additional ounces out of detour to offset some of this pessimism? tony: there has already been a plan put in place, momentum has been building. in terms of success, they have a solid performance last two quarters and we see that internally they will have a good fourth quarter and see momentum building into next year. we see tracking fairly well. definitely a big part of the increased production.

new permits, which could come into play before the second half of next year but possibly into 2021. alix: you look at it more as defense or offense? the other worry is something about your mind and australia, if that is not going as well and you need other asset, does it feel like that was it the environment for m&a? or both? tony: it was neither of those. the mind and australia is doing well. upside in terms of what is going to happen with that sustainability for quite some time. in terms of what we have seen in the opportunity with detour is it is a world-class asset, it is in our backyard, we understand it, we understand geology and we see an opportunity. part of the concept, and maybe when we talk about what you do m&a, you are looking for value

other people did not see. that is what we see. we see value. we have to do work to create that value but we see opportunity to create value not recognized in the store yet and the market does not say. alix: gold prices, what you think for next year? tony: i would like to believe we are on the right path for where gold is going. gold could go higher. some people in the last 24 hours telling me they think gold is going to $2000 announced. ounce.0 an the way we run our business is instead of focusing on where the price of gold is going, we try to mind as many ounces as we can and let the -- alix: tony makuch, kirkland lake gold ceo. time you'ret

talking about $2000 announced? ounce.0 an michael, appreciate you hanging out with me for the hour. best buy getting a boost in premarket trading after a beat and raise. more on today's technically speaking. if you're jumping in your car, tune into bloomberg radio heard across the u.s. on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time for technically speaking. bill maloney, chartered market technician and voice of bloomberg equity squad joints me now. listen to bill on the bloomberg . type in squa bill: best buy did report this morning. we had been in the trading range since the february gap. resistance at the top of the range round 79 if we can break above 79, we are looking at 2018

highs of 74. alix: let's get to palo alto. that stock is down, give me a sense of where the support levels are. bill: the stock is down 8% in the premarket. it has been in a trading range all year. was bumping up against resistance. clearly will fail at that level. first is to 30 which is the august high, and then the 100 day at 223. alix: bill maloney setting up her traits. that does it for me at "bloomberg daybreak: americas." stay with me for the open. julian emanuel l will be joining me. this is bloomberg. ♪

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alix: coming up, china and the u.s. holding trade talks over the phone. making progress on relevant issues and agreeing to keep in charge. j tout -- jay powell striking upbeat tone on the u.s. economy and saying the right policies could extend the expansion. market holding steady. datators looking ahead to with the focus on consumers intensifying. 24 record closing highs for the s&p for the year. s&p futures trying to cling onto the record line -- the record run. yields down to basis points. pretty calm as we head for the shortened trading week. we begin with the big issue. markets looking for tangible progress toward a trade deal. >> markets looking at the short game. they want a deal. >> we have not seen anything legitimate on the trade deal. >>