u.s. and china move closer to a trade deal despite conflict over human rights and hong kong. cracks in china -- the country --es its first ipo in 20 since 2012 as confidence starts to break. exit page and sergei brin stage right. the founders of alphabet give thunder pichai the reins, ending their attention to turn their company into the warren buffett of tech. welcome to bloomberg daybreak. i am alix steel. the markets whiplash to earlier today on that headline that bloomberg roque that perhaps -- broke that we are still inching toward a tree deal. we saw a huge decline in equities and the bond market. we are reversing that a touch, futures up by .5%. 10 year yields are up by two basis points. yesterday we saw the biggest drop in 10 year yield since may 2018. it is time for global exchange. we bring you today's market moving news from around the

world, from hong kong to vienna to u.k. and to washington. we are on the ground with all this morning's top stories. the u.s. and china are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase i trade deal according to people familiar with the talks. this to be expect reached before december 15. joining me is chief -- bloomberg's chief asia correspondent. >> we have some takeaways from our colleagues in washington and beijing. they are making the point that president trump's comments yesterday do not necessarily indicate that these talks are stalling, even though he was downplaying the need for an urgent deal. on the flipside, we have in hong kong and xinjiang are not going to derail the talks are these talks to

continue to push forward. we now look at the december 15 deadline. on the chinese side, they have a redline around tariffs. there are some details on which tariffs are to be rolled back. before we get too optimistic, i would say we have had some strident measures from the foreign ministry when the spokeswoman lasted u.s. lawmakers as ignorant, shameless, and hypocritical. , whereow we go to vienna opec and its allies are sending mixed signals about wether they are considering deeper production cuts. the existing 1.2 million barrels. scenario.n this additional 400,000 barrels a day . all member companies should share.

nobody should bear the burden. alix: give me the latest. morning. we are seeing mixed signals, but it would not be a opec meeting without the drama. we are going to hear these proposals floated ahead of the opec meeting tomorrow and opec plus friday. would you heard from the iraqi minister was what we heard over the weekend, he is 400,000 barrel a day plan. he said other members support this deal. we need to take this with caution. iraq has been one of the worst when it comes to compliance, the worst for the record of most major producers. on top of that, an advisory board that met in vienna did not even discuss deeper cuts. i see this is problematic because they are throwing a bone to the market for deeper cuts. is just a regular rollover of the status quo, how bad would that be for prices? this is a sensitive and critical time for the kingdom, which is

the de facto leader of opec. they have the aramco ipo. sources are telling us it is the upper end of that range. that would make it the biggest ipo in the world. alix: i keep hearing $40 a barrel potentially in the offing. hour, ip in the next will speak to one of the first to introduce capital discipline into the oil market. what is he see over 2020? now we head to the u.k., or nato nato leadersere discuss arms-control to china. joining me is maria tadeo. what is on the agenda for today? what to do with russia, what to do with turkey, and what to do with china. if you take a step back and look at these two days, the obvious headline is what a turnaround for president trump, who went from criticizing nato, saying it

was obsolete, suggesting the u.s. was prepared to walk out, to now defending nato, saying this is an organization that has worked well and taken major credit from that increase in military spending. two messages from donald trump today -- he is telling european countries i am not going to let you tax my american companies. if anyone is going to tax them, it is going to be mean, and again stressing that -- it is going to be me and again stressing that if they do not trump says perhaps he needs to look at this as a trade story perhaps also hinting at tariffs. he is meeting angela merkel in a short moment. that is another country that does not hit the spending target. we know donald trump and angela merkel have had a difficult relationship. that is the meeting today that is worth keeping and i on -- an eye on. alix: now we turned that leadership change in the tech

world. larry page and surrogate written -- sergey brin stepping down. join me on the phone is a bloomberg in tech reporter. what is the why behind this? >> this formalizes something that has been going on for a couple years. larry and sergey have not been around the company they speak at meetings internally care they meet with executives, but they never talk to the press. when regulators and politicians wanted to hear particularly from larry page about what google was , he completely avoided them and let sunder pichai pick up the slack. this formalizes the situation we have had for a while now. is running the whole thing. the take away is that it could be the end of this whole

alphabet spearmint, this warren style system of splitting up the future bets of google from the main revenue base and working that into different units. we are curious to see -- does he start to selloff inside google? does he lower the amount of funding that these ideas get? alix: thank you so much. investors are in a long list of economic data this week -- eyeing a long list of economic data this week. they will get manufacturing services tomorrow. we will end the week with the november jobs report. here in new york with more is michael mckee. what we need to pay the most attention to? michael: the story until friday was markets could be volatile because of trade deadlines. we were no longer going to be worried about -- until monday,

with the ism manufacturing index not only failed to improve but went back down again. manufacturing is a small part of the economy. the biggest part is services so today he focus is on the ism services index. it is forecast to be a little bit improved. it has been running above the contraction line for some time. it did not go below like the manufacturing index did. the issue is -- are american consumers still going to hold up the service part of the economy? watch the new orders aspect of this for some clues as to the future of not just that but hiring. that is the other number we get today, the adp index. it is not normally a big indicator, though it is traded on. take the gm workers out of their calculations last distortedwe may see numbers or numbers that are hard

to reconcile. michaelank you so much, mckee. house intelligence committee democrats released their findings yesterday, saying the evidence of the president's misconduct is overwhelming and so too is the evidence of obstruction of congress. joining me now from the white house is kevin cirilli, bloomberg's chief washington correspondent. spoke to aerday i senior eight to a prominent republican senator who told me they are not blinking as the house continues forward on the task toward -- path toward impeachment. house judiciary committee -- today's house judiciary committee meeting is being met with i roles at the white house -- eyerolls at the white house. today, four professors are testifying, legal scholars there

testifying before the house judiciary committee. three of them selected by the democrats in control of the committee come up one of them selected by the president. president trump yesterday in london said he would have preferred for hunter biden, joe biden, other folks that republicans would like to see investigated testifying before the committee. democrats say that is not simply the case. the question from a timetable perspective becomes when will the senate likely have their trial? yesterday on capitol hill, there was an interesting exchange with senate majority leader mitch mcconnell, saying he is going to try to work with senate minority leader chuck schumer to get the rules paved out, but if that is not possible the republicans likely will have to accept the rules in -- set the rules in the senate trial for themselves. that puts us well into next calendar year for when this full whole matter is finally

settled. alix: here's another story i am watching. democratic presidential candidate joedemocratic presidel candidate joe biden has a way to pay for a $3.2 trillion policy proposal. bloomberg has learned he will call for new and higher taxes on the wealthy and corporations. he will include a measure targeting companies like amazon and netflix that have paid no federal taxes in recent years. he plants sanctions on countries that help corporations avoid taxes. he will end fossil fuel breaks. also some breaking news for you -- ryanair is cutting their summer 2020 growth on boeing max delays. earlier, ryanair said maybe they would get the max in january but it would probably be february and march. now that company is pushing back their growth for the summer of 2020. they will close two more basis. they have about 10 maxes. they ordered 20. ofing up, we will have more your morning treat analysis on

the markets. ♪

alix: we are going to give you the news and get the trade day analysis of the markets. sassoweramian bloomberg intelligence. also, paul richards joins us. we missed you. kick it off. lastd some action of the 48 hours. i am shocked people are still trading on these. >> you have to. you cannot sit on the side of this. one thing the president has taught us about treating the headlines is -- fickle is the

word that was used by a friend of mine as to what this means for trade policy of the white house. do not listen to what the president said. it does not mean this talk was stalled. they are still moving forward. we need to hear what china has to say. of the foreign affairs ministry out of china were none too kind this morning. i would say take this in stride. there is a long way to go yet. >> the reversals today were meaningful. if you look at a lot of the asset prices in the market, we have gotten complacent. we are back down again. are starting to charge more dollar protection, which is a sign of less complacency going into year end, which is not necessarily a bad thing. >> nothing changed. you have a president that is

pretty jetlagged and has just been to afghanistan. then you put him on the world stage in europe. you should not do that. you should not put president macron next to him. you set him up to have a fight. i think it was completely off the cuff about china. chineseooking at the rhetoric, it is increasingly positive. i maintain the view there will be a deal by christmas. alix: you disagree in terms of the rhetoric. do see china's rhetoric more positive? iscent: the foreign ministry coming at the hong kong standpoint. they are pushing that hot button. it does seem to be at the moment that they are keeping both of these tracks separate. if they converge, you have a big problem. paul: they have to address hong kong. they have done it cleverly. learned was key was

u.s.-china trade is about europe. he will turn his attention to europe and it will get ugly. even the fact that he is talking about brazil and argentina. argentina almost defaulted. of course the currency is down. he is going.where he is going to keep trade. he needs to stay focused. europe, be very careful. president trump is using the tariff war. what he has done, on the back of brazil and argentina and any tariff skin ounces -- last night he basically threatened to put tariffs on europe for not tariffs he announces -- last night he basely threatened to put tariffs on nato for not meeting spending for nato. paul: he was off the cuff yesterday. he had the stage. he looked tired. he was angry. he and macron do not well together. they used to.

macron now. boris does not want to be his friend this week because he wants to get elected next week. you have to stay the course. i think u.s. and china are still on. incent: if you look at it stride, instead of taking a shot at china, he took a shot at argentina and brazil for doing backdoors with china. paul: when you look at the fact helping,il with china i tend to agree with you. he was annoyed there. you have to look at what is driving markets. a 2% correction is ok. it is december and it is pretty illiquid. as for him talking about the fact that he is focused on jobs, he gets to look at those on friday. then he starts talking about the

stock market, so we really know what he is looking at. damian: just to get -- alix: just to get a sense of the action we saw, we know what happened to the s&p. , theis for the long bonds biggest surge since brexit yesterday. you had that huge buying and treasury. you fade just about everything. things are getting overdone. it is december. our kids are marginally illiquid compared to the rest of the year -- markets are marginally illiquid compared to the rest of the year. even when there are opportunities, people step back a little bit. little morewatch a than you play, but you cannot stay out completely. that is why we get this chop back and forth. really good trading opportunities. in the fx market, december has been some of our best months. in a way, it has been the most painful because that all goes to the house. good point make a

with treasury yields. who stands to lose the most if u.s. treasury yields go up? that is where you are stealing from. talk about thailand. those are the countries that lose in terms of yield. look at the front end. we have nothing priced into the u.s. front end. now we have an 8-bit move yesterday. i think the markets are going to start pushing on the fed a little bit more, trying to force them down that path. paul: i think the fed has something up their sleeve -- ait. you have progressed that argument. i think the fed is on hold. unless china trade falls over. globallyentral banks are on hold with the exception of countries like australia new zealand. you are seeing quick spring bounces in the pop -- property market in australia.

comenk probably the u.k. australia, and new zealand have gone too far on rates. i think next year is going to be about who wants to move fiscally. that is when the market will reward that kind of trade. vincent: i would not expect that from europe at all. europe is barely growing, 1/10 of 1% maybe. that is life support. if they do not do something fiscally and trump does turn his sites to europe next year after china, they are in a heap of trouble. i think that is a great trade too short and get in front of -- a great trade to short and get in front of. alix: shorting the euro-dollar? vincent: shorting euro period. thatn: negative rates and pulled toward zero is something you cannot ignore. i think the fed is going to have to cut next year. i think negative rates are going

to force investors to bid up the long end. i am talking credit, u.s. treasuries. i do think rate cuts are going to be evident. we will see what happens with ism with the near-term data. if there is an extended impasse in u.s.-china trade, i think the fed will have to move. paul: i will take that bet. alix: thank you for that. all the charts we are using throughout the show -- go to gtv on the terminal over the next two hours and check them out. this is bloomberg. ♪

>> this is bloomberg daybreak. bloomberg has learned saudi aramco may price its ipo at the

top end of the market. that could result of the deal raising $25.6 billion. so-calledfore a overallotment option. there has been speculation strong domestic demand would lead aramco to price at the top. qualcomm just losing a huge antitrust case in south korea. the chipmaker was ordered to pay a record $854 million fine for abusing its market dominance. qualcomm plans to appeal south korea's supreme court. a ceo is hinting he may leave the largest commodities trader sooner than expected. year, he said in three to five years he would leave glencore. the firm's profits have been falling since the start of 2018. that is the bloomberg business flash. alix: another story that caught my eye is the auto market.

mercedes now outselling bmw for a second month in a row in november. to anarrows bmw's lead little less than 3500 vehicles, though tesla takes the cake in some respects. meanwhile, you have job cuts come audi leading the way in terms of job cuts. they announced cuts last week. it is turning out to be one of the worst years ever for auto around the globe. more than 80,000 jobs being cut. the majority -- germany. coming up on this program come out more on trade and weakness in china. you'll take a look at what it all means for 2020. for 2020. ♪ ♪

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springs provide edge to edge support, responsiveness and comfort, while premium foams relieve pressure. keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts, experts choose to sleep on it too. try it yourself in any west elm store. or order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and, because everyone needs a place to rest, we donate tens of thousands of mattresses to those in need. experience the leesa hybrid mattress. right now, it's on sale. order today. go to leesa.com. alix: this is bloomberg daybreak. happy wednesday, everybody. in the markets, it has been a whippy three days.

future is now up about .5%. the news that bloomberg broke that perhaps china and the u.s. are closer to a deal than originally expected after president trump poured water on it yesterday helped elevate the equity market. you had and a norma's -- enormous surge of bond sales. the curve is still flattered 18 basis points. the currency to watch is the cable rate, over 130 at this point. it is the strongest level against the euro since made me 2017.may boris johnson is still hanging in there in the polls against jeremy corbyn. for a deeper dive of where we eeand on trade, mike mck joins me. the story has been we were going to get a trade to

deal with china and then things would calm down. are we going to get a deal? that goes back and forth. will we have a calm 2020? we are starting to see the effects of the trade wars in the economy and you can see it here. the red line is where the president started with tariffs on washing machines and solar panels. since then, tariff revenue has risen by the contribution of exports to gdp has fallen significant link. significantly. fourth quarter so far says we are growing at 1.3%. on top of that, the deal with china -- maybe. trade wars are expanding, the president talking about it 100% tax on french imports of champagne and other goods because of a potential digital services tax. we call the champagne tax the alix steel tax. he has also put a tax on steel and illumina -- aluminum imports from brazil and argentina because he says they are manipulating their currencies. their currencies have weekend for political reasons.

the lines show hope -- how much those countries have been spending -- millions of dollars, trying to bring their currencies down. the markets will not let them and the president does not seem to get that. we have to look at trade wars with china. china, even with -- if we get a deal, may prove to be a loser for the economy. you look at u.s. exports to they and all of a sudden fall off. suppose we get a deal. this area where i have the red arrows -- we have lost that business. will that growth rate resume or does it start from the lower level and the u.s. economy is worse off? that is a decision the president has to make. one thing i want to leave you with is the december 15 tariffs. take a look at what is going to happen there. the president has decided to put tariffs on the 15th. consumer goods will be clothing

and shoes, cell, things like that. you will see videogame consoles, pet toys. i want to point this out. tariffed as well. americans will feel this if they go into effect on december 15. does the president really want that? champagne isrite france,e champagne from so i would be hurting from that. paul richards is still with me. 2020you base that into a outlook, do you hedge for risk on the upside but also calculate the internal trade risk? paul: the first thing you have to decide is, going into next year, are you going to have a trade resolution? i think the 15th of december comes and goes without increases. with the exception of champagne.

i think there will be an element of rollbacks. i think that is what china is insisting on. i think this is what they are down to now. assuming you get something palatable to both sides, we kick off the new year with phase one done. but you have 90 days from today until super tuesday. next year is about political risk. 330 five days until the election, and he knows that. so to the democrats. i think this one is going to fade away. i think the fact they are talking censure -- they are looking for an out. 20 is about politics. -- 2020 is about politics. it is game on. where does warren stand versus biden and does bloomberg stand to come through with buttigieg, etc.? politics need to be priced. atx: when you take a look

where you're going to get your returns for 2020, bank of america had an interesting quote saying stocks are inspected to outperform bonds in 2020 as the global economy bottoms out of the first quarter well monetary policy remains accommodative. alix: -- paul: i think this year was the stock game. i have been here several times: 3150 on the s&p. where is this going? this next year could be a year of consolidation. we hold the gains with a lot of volatility. i think the second quarter is going to be the tough one to trade. you are going to have to start factoring in how left with the democrats go and could they actually win? the stock market would hate that. that is where the volatility kicks in. my personal view is the democrats are going to realize that will not be trump. as you go to more of a centrist candidate, i think that is when politics kicks in and the third quarter and equities will do

well again. in a year, i think the equity market will be higher, but we could see plus, -78%. plus, minus, 7% to 8%. i am positive on the u.k.. i think boris is going to win next week. i think he is going to bring fiscal stimulus in any way that europe is not going to. i think europe is going to benefit from a china trade deal. you can see the layoffs. this is about the china effect. you get the trade momentum going again. i think not everything is going to be that. china is going to get a lot of manufacturing back and this will benefit asia and europe. i think you stay in the u.s. but start to look at potential value elsewhere, particularly in asia and europe. alix: you have to hedge that just in case since it is predicated on a trade deal getting done.

i think next year is a boring year for treasuries. was going along treasuries at 150. i would not do that trade. -- i think fact that central banks are on hold next year. probably 2%.s i think central banks are on hold. you can be long on treasuries and enjoy that i think it is going to be relatively boring. do i get into gold? i think there will be times next year when something like gold and -- i'm not going to say bitcoin because i never discuss bitcoin -- what alternative investments will come into play. when you are looking at how to hedge it, do you want to buy a lot more risk now?

to return profile is going have to be re-rated slower no matter what aspect. back to august. everybody gave up in august because of trump. that is when i really liked risk. i think the market has been chasing risk ever sense. that to present selloff -- if the market was long, that could have been a move. i think a trade deal, probably a three to 5% upside. then it is time to consider laying off on risk. that place to my mid february scenario around super tuesday with politics. i would reduce an element of equity. rounded out in terms of china. you have 12, 15 defaults in november alone. you had a failed ipo for the first time since 2012. that is nothing to do with trade. how do you look at it? paul: we know they were trying

to reform anyway. it has been a tough year. there is a lot going on, but i do not like betting against china. go -- they play the long game. they will be disrupted by trump and they may have to have him for another five years. i think they are learning to work with him the way i think europe needs to learn to work with them -- with him. i think the bad news we are seeing now -- i think the market is going to get used to it and there is potential upside, particularly if phase one is done. alix: paul richards sticking with me. we want to give you an update on what is making headlines outside the business world. >> the u.s. and china are moving closer to a tree to deal despite heated rhetoric. u.s. negotiators expect a phase i agreement to be completed before december 15. that is when american tariffs are set to rise.

outstanding issues remain, including which tariffs to rollback and how to guarantee china buys american foreign products. president trump is a clear and present danger. this declaration from u.s. house democrats laying out the comprehensivet case yet for impeaching the president. it says he abused his power, compromise national security, and tried to cover it up. the report makes it a -- makes a formal house impeachment vote all but certain. in the u.k., there is growing confidence the conservatives election.ext week's the pound is trading at over $1.30. show prime minister boris johnson's party holding its lead over jeremy corbyn's labour party. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

a look at, if we take what cable is doing, it is at the highest level since may. you like the u.k. maybe next year. 123. i have liked it since i was over there a month ago. there is a lot of optimism around boris. what struck me as the market did not want jeremy corbyn. he spoke to people and shops. he is not popular. boris is fresh. he is new. he has pulled through what may could not get done. i think you will get momentum if he wins next week. i think he is likely to win. i think the market will drive the pound up. i think we will see u.k. assets rise in that environment i think the next leg is he will couple that with fiscal stimulus in a way that europe cannot. next year, for the first six

months, it may be about the euro. i think the market will get worried about its ability to get anything done with europe. i would not bet against morris. alix: don't bet against boris. that is the take away. richards of medley global advisors. 2019 shaping up to be his hedge worst-performing year on record. if you have a bloomberg terminal, check out gtv . you can go through and check it out. this is bloomberg. ♪

>> you are watching bloomberg daybreak. dealing a news

setback to boeing for united placing a $7 billion order for 50 of airbus's jets. the plane will place united -- 737.cing united's boeing it is capable of flying the north atlantic route. salesforce -- the software maker giving a profit forecast that fell short of expectations but sales beating estimates. in august, salesforce closed his biggest deal ever. -- its biggest deal ever. move ahead for takeover talks with xerox. in a letter to shareholders, he said a tie-in between the companies could lead to more than $2 billion. plan amounts to little more than rearranging the deck chairs on the titanic.

$33 billionxerox's offer. we turn now to wall street and to discover three things wall street is buzzing about. the billionaire investor may have a book that has sold millions but his hedge fund lacks behind. fed blesses the use of alternative data. google founders give up on buffet tactics. larry page and sergey brin backtrack on their hands off let's go totyle. you first. fund?appened to the hedge >> everyone is hanging onto his , trying to see investment and leadership will you -- wisdom. goodould think he has a

track record but it is hard to post good numbers year after year. he is facing the same issue other macro investors have faced. >> we were just talking about it. he has had a lot of changes. we saw eileen murray leave yesterday. crossroad where performance and succession is coming to a head. inhe has had a better year january. he got married to a former trump advisor. he is at the top perch. he has had a good 2019 but a big challenge ahead of him. alix: let's get to the second story, which has to do with lenders' use of alternative data. instead of now saying we can look at different things, what does that mean? >> lenders have been trying different ways to underwrite consumers that may be do not have a traditional credit history. this latest statement from the fed and a bunch of other regulators is saying we want you

guys to look at this. we think this could be a way to underwrite consumers who have not had access to credit in the past. they are focusing on data like bank balances. you are not getting into the more out there stuff like social media or education history or anything like that. -- maybea person is does not have a regular paycheck. being able to assess that and based your credit worthiness on that is what these regulators are asking for. >> it opens such a cam of -- can of worms. you have to tread carefully. i was talking to someone who said there were some that were looking at stuff like analyzing your linked in professional network to gauge your credit worthiness. alix: that is scaring. -- scary. >> i need to to connect with you guys on linked in. that is scary. alix: it shows banks are competing for a pine that is this big and they all want to

increase that pie in some capacity. >> when you look at it, the only way to make that pie bigger is to increase the amount of people you can underwrite to. >> we have had the debate recently, sparked by the issue around apple. we do not know if there is a bigger issue out there. elizabeth warren told us a arele weeks ago that walls only as good as the data you feed into them. alix: google -- the founders are leaving. they wanted a buffet style company. i guess we can call it that. >> for me, this is a significant news but not earth shattering. the guy they are giving the kingdoms to -- the keys to the kingdom to come in under p try, re: trolls it -- the keys to the pichai,to, sundar

already controls it. why would you want to spend the next 10 years, next decade wrestling with politicians and regulators? you might as well just enjoy your money. alix: i think they still have all the voting shares. they might do a little mud wrestling. >> all the control without the responsibility. alix: that is awesome. i love that job. thanks very much. off the beaten street, a tv commercial got people talking not in a good way. >> are you ready? >> now. peloton facing backlash for this at. -- ad. critics call it sexist and classist. shares fell 9% yesterday. peloton did not think there was

any connection between that and the ad and that holiday sales will defy any backlash from this ad. pound beginning for a fourth day. take.s today in trader's if you are driving in your car, into bloomberg radio. this is bloomberg. ♪

♪ take.time for trader's linson -- listen to vincent on the terminal. you're looking at cable. vincent: a lot of momentum into the 11:00 a.m. -- the 8:00 a.m. fix driving this this morning. a lot of drivers -- buyers being told london is pushing this higher on the back of polls showing conservatives are

leading into the elections. a little concerned about the polls. a halfa poll a week and ago -- 40% of the population say they still may change their mind on which way they vote caret 30% of the population is undecided. there are a lot of factors going into this election that could bring us back to the same story we had in 2017. it is a much closer vote, which could be devastating for sterling. strategies going into this election. this may not turn out as well as conservatives think. alix: good advice. fixed income chief economist will join me. this is bloomberg. ♪ his is bloomberg. ♪

♪ alix: welcome to "bloomberg

daybreak" on this wednesday, december 4. i'm alix steel. let's take it from the top. pres. trump: they told us today, they told us yesterday. we are having ongoing discussions, and we will see what happens. alix: the u.s. and china move closer to a phase one trade deal. u.s. negotiators expect one will be reached before tariffs are raised on december 15. trump's comments yesterday don't necessarily indicate that talks are stalling. alix: issues are now agricultural purchases and what tariffs to rollback. >> the focus is on this specific $400,000.additional alix: opec ministers talk up more production cuts ahead of the meeting in vienna. >> when it comes to compliance, iraq has been one of the worst

amongst the major producers. alix: the pressure is on saudi arabia less than 24 hours away from pricing aramco's ipo. more leaders meet for the second day to mark nato's 70th anniversary. >> he is meeting angela merkel in very short moment. that is another country that doesn't hit that spending target. we know donald trump and angela merkel have had a difficult relationship. the meeting today is really worth keeping an eye on. alix: draft declaration shows the alliance labeling china as both a partner and rival, saying, "we recognize that china poses both opportunities and challenges we need to face together." but was not expecting this, in some ways i am not surprised. alix: google's founders stepped down. >> the take away here is that it might be the end of this whole alphabet experiment.

alix: leaving another in charge of the ad giant and its businesses. and a whipsawed market over the last three days. sb future still climbing up by about 0.5%, despite the fact that president trump seemed to throw cold water on a phase one trade deal. that now reversing this morning. you are seeing selling in the bond market after yesterday's monster rally in yields, the best day for yields since may 2018. joining me now, nathan sheets, fixed economist. you're the expert. what do you make? who's right, who's wrong? what is your base case? nathan: my base case continues to be that president trump and president xi would benefit from a deal. doesn't mean it is going to happen today or tomorrow, but in coming weeks, may be in the

coming months, there will be something. yesterday, president trump was reasserting i am the guy who decides. no one else decides. furthermore, he was asserting , you don'ttiation look desperate. he's just posturing. but i think the defining realities of this are trump needs it for 20 politics, and president xi has got a full plate. if he can remove this even plate, ity from his would be positive. i think that's what we seen in the new slow today. maneesh, you are bullish for the s&p. how much of that is related to we are going to get a deal done? aneesh: i think it is important part of the whole puzzle. expect a full, complete

reversal of tariffs, but at least a limited phase one deal is part of the scenario. the second part of that is that you will get a turn in the credit cycle. i think one thing to keep in mind, that the manufacturing slowdown we are having an some optimism there is predicated on the current trade war, but also on the credit cycle, which is independent to some extent. china is very important part of the puzzle here. think?athan, what do you nathan: i very much agree with china being crucial for the markets, and i also agree with the view that we don't need a total retrenchment of all of the tariffs. i think if the two sides get together and just say, look, what we are going to do is not raise tariffs on each other anymore for the next year, that removes a significant downside

tale to the market risk. if it is more than that, it becomes even better and creates a bit of upside for the equities. maneesh: just looking at the reaction of broad equity markets to the news, obviously it is a part of that. but if you dig deeper and look at the stocks which are more exposed, they actually have not gone back to full optimism level of april or the first half of the year. alix: you're talking semis? maneesh: semis are fine, but what you do is it doesn't matter if you have more international exposure. it really matters how much stuff is crossing the border. they are the ones that haven't really rallied that significantly as compared to april. i agree that if you get a more significant role back, there's more upside from that respect. you can look at the currency, you can look at the

emerging-market index versus s&p. we have not really gone back to the first quarter kind of levels of this year. alix: what gets me worried from what both of you are saying is it is not just trade. china's profiling. we had a failed ipo today from china. 12, 15 companies missing bond payments in november alone. 15 companies, missing bond payments in november alone. that is irrespective of the trade issue. another one is ongoing efforts to provide stimulus and hit something approximating the growth target, which for this year is around 6%, may be a bit lower next year. but the third one is what you are driving at, they are also trying to impose increased

financial discipline on the economy. alix: so it is a good thing. nathan: over the long run, it will be a good thing because you are holding that discipline on these chinese firms. in the near term, what we are worried about, how the global economy is evolving. it does pose some downside risk over the last yourself. maneesh: absolutely so. you had to global manufacturing slowdown. there were two aspects to this. one was the trade war, which started the first quarter of last year. but global pmi's and the global rate cycle beat at the end of 2017. that's what is really effecting europe more than the trade war itself. so the recovery, we do expect a recovery. we think this is a soft patch. case is not a symmetric is the slowdown we had. alix: also joining us, nela

richardson, edward jones investment strategist. walk us through the levels for the u.s. do you think everything will be ok-ish? nela: it will be a meh market in 2020. through the 10 year expansion, the longest in u.s. history, we averaged about 2.3%. it is going to be below that, about 1.5% to 2% next year, powered by the resilient consumer. thatis why any wrinkle in press consumer suit is worth watching. mobile growth is important growth really -- global is important because really, the u.s. has one tool right now, and that is the consumer. alix: what i find interesting in everybody's 2020 outlook, there's a lot of binary outlooks. one in particular, bank of america, stood out to me.

they think that banks are going to outperform bonds. have60-40 portfolio we seen is not going to last, and equities are going to crush it. what using of that, that we are in an equity world? nathan: i think 2020 is shaping up to be a good year for risk-taking. i think that is true for equities, and it is true for credit. nela said,line, as is we are going to have mediocre gross. it is not going to be terrible, but also not anything strong. we are going to have mediocre growth, low inflation, and stimulative central bank in the united states and around the -- inflation, and central bank in the

united states and around the world. how much further can they run in this environment? 2020 looks to be a good year with the political unrest you mentioned dominating. maneesh: i would agree. target for the s&p 500 now, all of that is, not so much from the close. we think it is going to be 1% or 2%. we are much more cautious about pure earnings. all of this expansion is coming from valuation expansion. the reason we think valuations have expanded so far this year and will continue to expand, if lasto back and look at the 50 years, there have been five instances when the fed has eased in the middle of outside recession. we don't know if it is recession or not, but in those instances,

for the next two years, equities rallied by 20%. all of that is driven by valuation expansion. so we are setting up very similar. the important point is, of course, there is a divergence right now between manufacturing and the consumer. the consumer has been holding up well. if you go back to those similar soft patches, manufacturing actually slows down, and the consumer part of the economy doesn't fade as much. it feels like a soft patch, but v-shaped rebound. more of an l-shaped rebound. nela: it is going to be a slower grind with more volatility. we are expect and lower returns in 2020, both in equities, because we have these fundamentals that are still solid, but slowing, and also in fixed income because we are not going to see rights decline as

they did over the course of -- going to see rates decline as they did over the course of 2019. for that reason, we are telling our clients, get ready for more volatility. get prepared for slower earnings growth and lower returns. it is not a great message, but it is a better message than a bear market. alix: talking about consumer, i have to say, i bought an iphone yesterday. i had an iphone 5 and i bought an iphone x, so i did my part. it was the big talk and our editorial meeting. nathan sheets, maneesh desphande a come on deliver to send, you're all staying with me -- maneesh desphande, nela richardson, you are all staying with me. as we go to break, you are ticking a live look at watford in the u.k. secretary-general jen stoltenberg is speaking at the summit. we are waiting for that bilateral meeting between president trump and german chancellor angela merkel. we will bring you that when

those sit down. this is bloomberg. ♪

alix: you are looking at a live shot. president trump sitting down with german chancellor angela merkel for a bilateral meeting at the nato summit in the u.k. we will keep you updated on whatever headlines cross. i believe chancellor merkel is speaking in german, so we will bring you any news that crosses. in the u.s., we have adp breaking. we have a jobs report on friday, so this is a precursor. added 67,000 jobs in november, much less than estimated. you also had october revised down just a touch. this is a pretty big mess for adp, but i have to wonder how -- big miss for adp, but i have to wonder how much of that is the

gm strike that wasn't calculated in the last report. we do want to take you back now to the u.k., where president trump is speaking in that bilat with angela merkel. pres. trump: we discussed a lot. ,e had a meeting, unscheduled but we've already put out a notice. it was a very good meeting, i think. we discussed the kurds. we discussed numerous things. we are getting along very well. the border and the saison is working out very well. -- and the safe zone is working out very well, and i give a lot of credit to turkey on that. the cease-fire is holding very much so, and i think people are surprised. give someday they will me credit, but probably not. these been trying to do this with 100 years. that border is a mess for a long time. we took over the oil. we have soldiers where the oil

is. that's the way i like it. they can police their own border, and that is what they are doing. they can use other countries if they want. if they want to expend the time and energy, they can do, but this has been under siege for many decades, and it was time for us to leave, and we left, and it's been holding very nicely, so we are very happy, and we are talking about that. did you talk about protecting made a commitment in places like poland? very trump: they've been good. friendly, a lot of people respect turkey for the work they have done. -- frankly, a lot of people respect turkey for the work they have done. have been doing a good job on the border and the saison, and they have held. obviously -- and the saison, and they have held. , and they safe zone have held.

i really don't know. he would have to ask him. sam's like something that is not so complicated. he would have to ask him. no big deal. >> mr. president, germany has -- circumventing u.s. sanctions against iran. did you talk about that with the chancellor? pres. trump: no, but we will. i'm not going to say what i will say, but we will talking about a number of things. very good meeting. [indiscernible] pres. trump: say it again? >> will the u.s. put sanctions on north korea? pres. trump: we haven't really determined that yet. i think it is a problem, but it is a problem germany is going to have to work out for themselves. i hope it's not, but we will be talking about that. reporter: what was your response to president putin on the

moratorium for midrange weapons at the end of october? pres. trump: we are talking to russia about many things, including cessation on nuclear and nuclear creation. it is, in my opinion, the biggest problem the world has today. i think it is bigger than any other problem the world has today, and we are working very hard on it. he wants to see something happen, and so do i, and so does china. reporter: mr. president, did you talk about -- pres. trump: we are going to be talking about everything, yes. germany is a very big trading partner, but it's been really the european union, and we were discussing it. it's been tough for the united states. we've had a very bad in balance for many years, for decades, actually. we are discussing that right now. i think we will come to a satisfactory conclusion.

chancellor merkel: [speaking german] >> i think that the fact there is a new commission in place and there is new leadership at the european commission, that we have a very good basis to resume our trade talks. pres. trump: meetings have been set up, and we will talk. i believe that it will work out very well for everybody, and i think it should. we have some very tough barriers . they have created barriers, making it very hard for the united states really to openly trade, and that can't be done. we are going to be talking about that and other things. i think we will solve it. we do a lot of business, but they do much more business than us. we are going to change it.

i've been saying this for the last six months, the last year, and we've made progress, but we will make a lot of progress. we just want fairness. we have to get fairness in trade. not only with the eu, but with many other countries. we are talking to china, as you know. those discussions are going very well. we will see what happens. we are talking to china. we are talking to others. we made a deal with south korea. we made a deal with chan. -- with japan. japan deal is a partial deal. we have made over the big deals. the big deal is the usmca with canada and my sicko. nancy pelosi has -- and mexico. nancy pelosi has to get that approved. she doesn't have to talk to any of her democrats because they will approve it. their constituents want it approved very badly. that's where we are. we've made a lot of deals, and this is a deal i think -- the eu

is one of the more difficult deals we have because it's been going on for a long time unchecked, but it will get there, i'm sure. reporter: [indiscernible] pres. trump: well, he's two-faced. a nice guy., he's i find him to be a very nice guy. but the truth is, i called him out on the fact that he's got to pay 2%, and i guess he's not very happy about it. you were there. i couple of you were there. he's not being 2%, and he should be paying 2% in canada. they have money, and they should be paying 2%. i called him out on that, and i'm sure he wasn't happy, but that's the way it is. look, i'm representing the u.s. he should be paying more than he's paying, and he understands that, so i can imagine he's not that happy, but that's the way it is. reporter: mr. president, where are you in terms of persuading other allies, in terms of allowing china to build 5g networks? pres. trump: well, i'm not

working very hard on that, but i do think it is a security risk. it is a security danger. i spoke to italy, and they look but they are not going to go forward with that. we spoke to other countries that are not going to go forward. everyone i've spoken to is not going forward. but how many countries can i speak to? am i going to call up and speak to the whole world? it is a security risk, and our opinion. we have started, and we are not using huawei. reporter: [indiscernible] pres. trump: germany is a little bit under the limit, i will say that, but we will talk about that now. ok, thank you very much come everybody. thank you. i think that will do for the purposes of this. we will be having a meeting with the 2% people, and we will have a meeting with denmark, and then probably go directly back to washington because i can't imagine, i can't imagine -- will we discuss greenland?

what do you think? [laughter] pres. trump: that's good. that's a very good question. so we will go directly back. i think we've done plenty of press conferences. unless you demand a press conference, we will do one. but i think we've had plenty of questions. let me just finish. we had a term in this two days. i think nato is stronger than it's ever been. a lot more money is being produced by a lot of countries, and there is enthusiasm about it. within three years, you will be talking about $400 million more, and not by the united states, but by other countries. it's been very successful today, and there's great spirit, ok? thank you very much come everybody. thank you. president trump speaking in a bilateral meeting with german chancellor angela merkel. surprised as to how short it actually was, but some

highlights, the talks with china are going well, and there does seem to be some hope that the eu and china can come to some better place when it comes to trade. president trump also saying that he's done talking to the press for now as he heads back to d.c. mason sheets of pgim fixed ofome, leila richardson edward jones -- nela richardson of edward jones, and maneesh desphande of barclays are with me. any takeaways here? nela: the important thing to watch is december 15 because that is where the rubber meets the road. that is where we see if there is an onset of new tariffs. that is where we hope to have some resolution on an interim trade deal. we do not think there will be a cumbrian's of trade deal in 2020. there's way too much still on the table to be negotiated. a little peace and a little stability would be enough for the markets to keep climbing. alix: what i found interesting

is the eu talked felt like it was like, we will talk, maybe things will get better. there is a narrative that after the china stuff goes away, all of a sudden, laser focused on europe, and it will not be pretty going into election. what do you think? nathan: i think president trump very much has his eyes focused on the european union and its trade policies. i don't think it is going to happen in 2020 before the election, but if he is reelected, i think his second term is going to be looking at german autos. he's going to use tariffs on german autos as a lever to pick t germans- to pi against the french to do something about agriculture. i think the eu's agricultural policies are pushed particularly hard by the french. i think that, for him, is what he's after. it would be a big score politically in the united states for the farm community. nela: we saw a similar strategy

for brazil and argentina just this week, using tariffs as a backdoor method to help farmers with what trump has termed currency manipulation. alix: a stronger dollar, at the end of the day, is the complaint. maneesh: i think i agree. you shouldn't want to rock the boat too much going into an election year, but he does want some stability, so he will try to do that. if he gets reelected, i think he will then turn up the heat, to some extent. alix: what i guess i am confused about, is that good or bad? you had a 3300 target based more on china. you have debt issues in china stabilizing. but if you have this overhang, you're dealing with agriculture, auto tariffs. doesn't that they do not feel good about 2020? nathan: i think your takeaway is right, and that is what is happening. that's the conversation that is happening in boardrooms. that's why we are not seeing the investment, which goes back to

a oneint that this is hinge expansion in the united states that is all about the consumer. it will keep this percolation of uncertainty continuing area but when you come back and say it is not as great as it could be, but it is still ok. it is 1.5% to 2% growth. people are going to look around and say, what do we do? equities look pretty good right now. maneesh: i think that's a fair statement. again, like i said, ernie's growth expectations are not very great. -- earnings growth expectations are not very great. when we say this is a direct impact on tariffs is not very of stancil. -- very substantial. but the way it is playing out in the c-suite is basically capex is very low. look at capex growth. a bit of a pickup in the first half of last year, but after

that, capex has basically been zero. so this long-term planning is a big problem here. that is why earnings growth are limited, but the only reason to expect equities to go up is expansion. monetary policy is easy. the fed is excited to be on hold for the rest of the year, but if the data becomes worse, they will step in. if you look across the globe, 50% of banks are easing, the highest it has been since 2008. nela: trade uncertainty is for sure the overhang on business investment. it seems to be a catchall for everything that is wrong. what is wrong with manufacturing, what is wrong with. -- with capex. but we know these companies had a $1.5 trillion windfall, and didn't do much with it in terms of investment over the long term. we should watch this space, but

be a little cautious blaming trade for every ill in the u.s. economy. there seems to be some weakness that goes just beyond trade headlines, trade uncertainty. alix: hang tight with me, guys. we will do a market check and then get to some 2020 risks. you do have the s&p off the highs of the session, although just barely. a weaker than expected adp report, but the market taking that with a grain of salt. in other asset classes, a huge rally in yields yesterday, the most since may 2018. now you're seeing yields up by about three basis points as you has some selling coming into the market. we wanted to dig a closer look at the 2020 election risk. mason sheets of pgim fixed income, nela richardson of edward jones, and maneesh desphande of barclays are all still with me. with a biden coming out tax that will raise $3.2 trillion to fund all this stuff.

how do you look at 2020 and the proposals we are seeing for the democrats? how does the market and a ceo take all that in? nathan: i think the markets, also the corporate sector, are going to be following what happens in this election very closely. i think as we move further into 2020, this question of what will democrats do with taxes if they are elected is one that will loom very large. we saw joe biden's proposals out today, which was something in $3.5 trillionn to range, pretty moderate compared to what elizabeth warren might be proposing. i think the markets would be able to absorb biden level kinds of proposals. if you go much beyond that, i think it could be an enormous ,ource of uncertainty especially if we are in a world where trump is struggling, elizabeth warren gets the

nomination, and it looks like she might have some support in congress to do what she wants. nela: i think our base case for the extremes you are seeing in this political process is that there will be more gridlock in washington next year. that is our base case. but i someone who's spent the bulk of her career in d.c. as a research economist for the federal government, promises made on the campaign trail in iowa look very different when they get to the desk of the bureaucrats in congress and d.c. what we are telling our investors is not to put too much stock in what is happening in the political campaigns. focus on the fundamentals. that is what is going to drive earnings forward. alix: what i am struck by is no matter what, it feels like tech is going to be in trouble. bloomberg opinion had a great piece out on the leadership change over at google. "it is the unpleasant task of being the chair of a big tech

company. zuckerberg has become extremely practiced at apologizing. had hise -- bezos personal life on the pages of tabloids. cookies at the white house so often he should have a west wing frequent visitor card. probably not what any of them imagined job would be." what using of that? maneesh: independent of the change in political leadership in washington, clearly the focus on tech is a bipartisan issue right now, and it is sort of across the aisle. where was think about that is that the extreme would be breakup, and that, given the current president for antitrust law, is difficult to do right now. but i think the way we think about this is it is a little bit similar to what happens in financials. essentially, think of banks as

import for the economy. these big tech companies are butrtant for the bonus society. i think there will be more control, more friction. some part of trying to rain the men, and some since in, in somehem sense. privacy has been very hot in europe, and i think it is coming across the atlantic. i think there is a debate to be had with the civil libertarians .bout having so much data there is another assault that is much more blunt and nuanced, and it is a puppet -- more blunt and less nuanced, and it about populism.

by any metric, these are huge corporations. there's even an emerging body of economic literature saying these large tech firms are limiting the pace of innovation in the u.s. economy. i think it is still debatable as to whether that is the case, but the assaults are from many different quarters, and some, i think, are very nuanced, like the civil liberties point. some are very broad and potentially disruptive. but i think it gets us all to the same place, that these companies are going to have to be spending a lot of time defending themselves and their existence in some sense in washington in the years ahead. nela: i agree. i think you're going to see a lot of tech splintering, some rebranding efforts. we paint with one broad brush, but there's several paths of

business models, including the internet of things, loud computing, and all of these things that actually consumers want and are developing a need for. that is very different than the personal data as of revenue input, which we see with facebook and digital advertising. i think you will see tech pick a side, and then go full on on that side. facebook is going one direction, microsoft going in another direction. that will be a differentiator for investors, and they will stop being seen as just one big sector. alix: really great conversation. i enjoyed having all of you on. thank you so much, nathan sheets of pgim fixed income, nela richardson of edward jones, and maneesh desphande of barclays. coming up, i talked to ryan lance, conocophillips ceo, on 's buybacksducer

and dividends. remember, check out any of the charts we use throughout the show on gtv . this is bloomberg. ♪ ♪

viviana: you're watching "bloomberg daybreak." salesforce signaling a big-ticket acquisition and global expansion has led to higher costs. the software maker giving a profit forecast that fell short of expeditions. still, sales soaring 33%, beating estimates. in august, salesforce closing its biggest deal ever come a buying tableau software for $3.3 billion. billionaire investor carl icahn pushing nhp -- pushing hp in takeover talks with xerox. he said hp's standalone plans

announced to little more than rearranging the deck chairs on the titanic. last month', they rejected last month,s -- they rejected xerox's offer. mastercard announcing a stock buyback. this year, its shares are up 52%. i'm viviana hurtado. that is your bloomberg business flash. alix: thank you so much. we want to drill down into an oil company, conocophillips. in an attempt to distance themselves from troubled shale players, they announced a 10 year plan to buy back $33 billion of shares. joining me now, ryan lance, conocophillips ceo. great to see you. let's start macro first. a big question over the next few days is what is opec going to do. it really matters what non-opec

production is going to be. from where you sit, how do you think about it? ryan: it is a great question. we think the u.s. is going to continue to grow into 2020. we are probably a bit more bullish than some of the other folks. 1.1 to 1.2here from million barrels. as a look at what opec does, they are going to have to maintain their 1.2 million barrels a day cuts if they want to keep the market balanced the way it is today, and probably think about expanding some of those cuts as they go to this business. we don't expect that coming out of this meeting. we expect them to probably kick the can down the road for a time. u.s. growth probably consumes the incremental demand growth, so that conundrum, that issue, that context is still going to be alive and well in 2020, like it has been in 2019. alix: productivity is going to

go down for wells, all the good areas have already been drilled, you will not see the production growth in u.s. shale that we are used to. the other view is you have a lot more opportunities to be efficient. for your portfolio, what do you see? ryan: we are probably on the latter end of that. we see continued technology application. productivity is starting to plateau and maybe flatten out a little bit. we have only just started to crack the nut in terms of rockng more out of this and understanding how we increase recoveries. we see the cost of supply still coming down. we see efficiencies still why we areich is probably bullish you're on growth. i think probably 8000, 9000 barrels a day of growth. i am seeing some calls for

base case oil in the 40's, even if opec rolls over their production cuts. what do you think? ryan: i've stopped trying to predict it. -- it isng to will up going to go up, it is going to go down, but not necessarily in that order. we have just decided to erase volatility. we can't predict where it is going to go. we have to have a comedy that can give you downside protection -- a company that can give you downside protection. we have just decided to embrace that volatility and try to get a program that we can run consistent through the cycle. you need to do that by having a low breakeven, low cost of supply portfolio, and that is what we put on display in our 10 year plan to show that we have a philosophy for running this business aced on free cash flow, giving your shareholders a fair amount of money back, and improving our return on capital so we can try to attract some of

those generalist value investors back into this business that have fled this investing and energy business over the last few years. alix: do you think it is going to work with your stock, but also just more of the industry? what is going to cause the bottom in investor sentiment? i know you're going to say free cash flow and covering your dividend come about really? ryan: really, it is about returns in the business. dividend yield we have today is 1.5 times the market. you really have to have that kind of you. we compete against the broader market for investors and attraction. this industry has lost value over the last 10 to 15 years. we are determined to switch that around. the plan that we laid out for the next 10 years is a philosophy of running the business that is based on free cash flow generation, but more importantly on improving the returns in this business. to do that, you have to be

consistent. you have to have that strong balance sheet so you don't chase the cycle up, only to have to chase it back down. that is the plan we laid out to the market. alix: how much bigger do you feel you need to get in the permian, for example? ryan: i remind people, it is not quantity, it is quality. you have to look at the acreage we have in the permian. it is really high quality acreage on the state line in the delaware basin. excess oflly grows in the next decade, and probably becomes the largest unconventional play because we are in the sweet spot of the delaware basin. it is quality over quantity, and it supports 3% annual growth in the company, and we are a large company. we are a 1.3 million barrel at a company, and we will go 3% -- we will grow 3% year on average coming from this portfolio. the reason we can do that is we are a diverse company. we've got legacy assets around

the world, where technology has helped us mitigate decline, and we can add some of the production -- some of the unconventional production. so we are unique given the portfolio we have today, the resource we have captured in the portfolio today, and our ability to generate growth and returns on the capital in the business. alix: before you go overseas, is there any circumstance where you would then want to buy or add to your permian position? ryan: with think about acquisition as the inorganic sense of the gain. we are spending billions of dollars every year acquiring working interest, royalty interest, and working up our positions. we've done asset deals over the past years in excess of $1 billion. we are looking for distressed assets that fit well within our company, and bring those in. now you may refer to larger m&a, corporate acquisitions. what is good about our company is we don't have to do any of

that because we have a financial framework and resource base that provides the growth long-term, and that's what we went to put on display for the market. alix: but then you take a look at, say, occi. it either, but they saw acreage gains because of that anadarko position. ryan: we watch the market very closely, and there's opportunities out there that fit our financial framework. it's got to fit our balance sheet, our returns profile, and it's got to be competitive inside the portfolio. today, we are not investing anything inside the portfolio on a go forward develop meant basis that is over a $40 supply. but we look at all those opportunities each and every day. alix: you were mentioning offshore. we have seen so much money coming to u.s. shale over the last 10 years. do you feel that money goes overseas now, or that overseas

is going to be where it needs to be? offshore, brazil, etc.? ryan: today, you've got to compete on the cost of supply basis. the cost to develop the resource needs to be below $40 a barrel. we are pretty agnostic as to where that occurs. what we see in our portfolio, 50% of the capital is still going into the unconventional's over the next 10 years, but not at the expense of some of the other areas that have made dramatic improvements in their cost of supply. like alaska, what we are doing in canada, in norway, in all of our countries in asia, all of the middle east. we are in each of those region in a pretty balanced portion, but today, the balance still with our portfolio capturing a majority of the capital we are putting in because of the opportunities present themselves as a low cost of supply any portfolio. alix: all week we are doing a climate series.

how much of investor lack of sentiment in oil companies do you feel is structural, in terms of climate change and the peak oil conversation? ryan: we have a company that's embraced this conundrum on the energy side. affordable, get reliable energy to all corners. we've come out in support of a carbon tax. it is probably the best way to talk about how you go through this transition. but we've also spent a lot of time inside our company making what we are doing more sustainable. we've reduced our carbon footprint i 7 million tons over the last few years. companyhe only enp that's set in emissions reduction target for the company. we are on track to achieve those kinds of goals. i think we are on the right reliable affordable, energy that can fuel growth.

we've got to be a part of that. we think the existential threat to this business is not around the corner. it is still going to be a needed product and a needed part of the energy mix well beyond 2030, 2040, and 2050, but we realize we have to do that more sustainably, and we realize that the planet is warming, and we have to do our part to help offset that. alix: ryan, always a pleasure to catch up with you. really appreciate it. ryan lance, conocophillips ceo. ther on, i will speak to ceo of the loco, so don't miss that. out,u are heading 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. we are going to set you up

for trades of the day. , voice of the bloomberg equity spock -- equity squawk. bill: it held the 3400 level, probably a retracement, so that is a key level today. 3111, the today, december 2 blow here. 3120 2, 3144. if we fade, support back at yesterday's levels. alix: let's get some individual names here. salesforce came out with earnings after the bell yesterday. that movement has been getting a lot less. what do you see? bill: right now it is only about 1% after numbers. there's lots of resistance in this area. that is the all-time high. it is forming a bullish

ascending triangle pattern, but there's going to be a lot of resistance before we get through there. alix: last up, mastercard delivering a buyback coming before the bell. what do you see here? bill: they also raised their dividend. they do have somewhat of a flattening out in the 50 day moving average. 2.93%or resistance around today. this is clearly one of the all-time great stocks. today, look for resistance to 93. alix: that is an uptrend. thanks a lot. that does it for me here at "bloomberg daybreak: america s." ferro,open with jon casei jones, fixed income strategist with charles schwab. everyone uses their phone differently.

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jonathan: coming up, stocks bouncing back. bloomberg reports we are still on course for a phase i one escalates as congress over human rights abuses. china coming is a sharper focus for nato leaders gathering just outside of london. with 30 minutes until the opening bell, good morning. here is your wednesday moaning price action. equity futures up 0.4%. yields higher by two basis points to 1.74%. in foreign exchange, the dollar weaker come the euro-dollar just threw $1.11. can the u.s. and china keep trade talks on track? another layer of complicity overnight as house reps overwhelmingly approved sanctioning china for human rights abuses. ignorant, tootoo shameless, and too hypocritical."