sewing savings.on't cut speaker plus he says great progress has been made -- strong earnings trends, hiring plans, and a tight labor market. chiefak to david kostin, u.s. equity strategist at goldman sachs, for his 2020 call. welcome to "bloomberg daybreak" on this tuesday, december 10. is it trade or central bank in terms of market sentiment over the next few days? s&p off by about 0.3%. the fed kicks off its two day meeting today. sterling continues its climb higher as you inch towards that election on thursday. is it buy the rumor, sell the news? in the market, the three year went particularly well yesterday.

time now for global exchange, where we bring you today's market was a news from all around the world. from beijing to riyadh, to paris, london, and washington come our bloomberg voices are on the ground with this morning's top stories. we started in riyadh come over saudi arabia released its latest -- in riyadh, where saudi arabia released its latest budget. --emco has significant value aramco has significant value. >> we have done everything by the book. we are very pleased with the feedback we are getting from investors initially. we will watch how the market reacts. i am very optimistic because the company value is very significant, and we will let the markets cover that value. el-din, comegamal anchor of "bloomberg daybreak:

middle east," joins us now. sef: share trading starts at 10:30 in the morning wednesday, 2:30 in the morning eastern time. i know you are going to stay up for that, alix. 1.5% of the company is getting floated, which is much smaller than some of the other flirtations that are out there. think of apple, microsoft, some of the other heavyweights on the s&p 500. but now to the budget, the other crucial development. the kingdom is embarking on three years of spending cuts, a bit of a u-turn. they are confident they can start rely on the private sector to pick up the slack. folks at bloomberg intelligence and our chief economist for the region has crunched the numbers, and says that this number is a little more realistic, down from $85 a barrel for the basis

assumption to about $61 a barrel as we going to 2020 for those median forecasts. alix: thank you so much. yousef gamal el-din joining us there. now we had to china, where we saw diverging inflation paths. cpi went to a seven-year high, and ppi extended their declines. walk us through what kind of buying this puts the pboc in. reporter: that's right. we saw a diverging picture yet again, with consumer prices rising more than expected by 4.5% in november. that is a seven-year high. of course, surging pork prices are the driver of these higher prices because of the african swine flu virus that has decimated the hog supply in china. reducer prices continue to fall, but slightly more moderately, declining 1.4%. that does still extend the negative readings. economists say factory deflation

is a more concerning problem than the higher-than-expected consumer price inflation, since there is really no sign that the manufacturing sector is recovering. tojing is under pressure release more stimulus to boost activity, but this latest data is unlikely to swing the pboc's position, which is really moderate stimulus at this point. alix: thank you so much. now we turn to frankfurt. deutsche bank ceo christian sewing is optimistic as he course correct the bank. he spoke to bloomberg's matt miller. i am positive, and i am encouraged. we took swift momentum in the investment bank to focused on our key strengths, and that seems to pay off. alix: matt miller joins us now from frankfurt. what were some of the other highlights from the interview? matt: as you point out, they don't need to raise capital. they are ahead of a lot of their targets for the turnaround.

for example, they will have less 90,000 workers at which a bank, which was a year and target. optimisticewing very about the turnaround at the investment bank, saying he thinks revenue overall will grow. the fourth quarter has been very good so far, and that it will grow in the years to come. the concern i think investors have come of the profitability target has become ambitious for their 2022 profit ability target because of interest rates going even more negative here in europe two or three months ago, and they lowered their revenue target for the private bank and for dws, so they don't expect the private bank revenue to grow anymore. they've made up for that with the increased investment bank revenue growth target, but it is just a concern because the investment bank was

one of the units they were trying to downplay with a focus on private and corporate banking, and now it looks like they are going back the other way. the shares, while the initially jumped this morning in frankfurt trading, are now slightly down. alix: really appreciate that. now we had to france. protesters are gathering at the government and labor unions battle with president macron over pension reform. carolyn quinn on joins us in paris. what can we expect later this morning when we see the next round of protests? new mass demonstrations are expected to kick off in paris in just half an hour from now. the smaller demonstrations that already started across the country in cities like marseille or bordeaux, so activists have already started joining in lyon. doctors and teachers are also joining, so hospitals and

schools are also on strike across the country. even parts of the police are expected to join when the prime minister unveils the details of this pension reform. this pension reform is supposed to end the system that is very complicated and that has been in place since 1945 in france. they want to merge of the different complex systems into one system based on points that would be the same for the public and private sector. one option to calm the streets for the government would be to introduce the system more generations, but the unions have said they don't want to sacrifice any generation, so there is very little room for maneuver. we will have to see whether the protests today turn out bigger than last thursday. we had at least 800,000 people in the streets across the country.

that was one of the biggest turnouts for french protests in almost a decade. alix: thank you so much for that perspective. now we had to the u.k. the election is in its final days as the tory party is maintaining its lead, the labour party polling at 32%. joining us is david merritt. all the talks were about this and aer interview phone between boris johnson and reporter. david: he had this very awkward encounter with a reporter, who showed him an image of a child being treated on the floor of a hospital, a child with suspected pneumonia. mr. johnson not willing to look at that image, and in the end took that phone. a very bizarre exchange. it does feed into the line that the conservative party doesn't care about the national health service. he's been trying to steer the conversation back onto his favorite topic today.

, andis getting brexit done his words. jeremy corbyn's labour party are going to be hammering home the message in the final hours of this campaign. show ast recent polls little bit of a narrowing into the danger zone, where perhaps the majority is at risk. tonight,ave a big poll 10:00 p.m. london time come out of the biggest and most closely watched, which macy where we are headed for that election thursday. alix: thank you so much. now in the u.s., markets are focusing on the fed, which starts its two-day policy meeting today. michael mckee joins us in washington. lay it out for us. michael: unfortunately, i have the least exciting story of the day today. isn't making it easy. that chart shows a 100% chance

that the fed will not cut today. and why would they cut? the jobs report totally validates the fed's monetary stance. so why don't we talk about what they might say rather than what they might do? people will look to the dot plot to see if they wipe out any chance of a 2020 rate hike, at least from what they see now, and look at the economic projections to see if there is anything out of line and what they see for growth, unemployment, and inflation next year. of course, we will ask jay powell what could possibly change the fed's mind about cutting rates more. not any kind of a useful answer expected at this point. we will also see if he says anything about trade, but we might get that usmca treaty before they make their decision, so not a lot to expect from the fed at this meeting, which is exactly how jay powell once it -- jay powell wants it.

alix: michael mckee, thanks very much. coming up, we are going to have more on your morning trade and analysis on the markets in today's first take. this is bloomberg. ♪

♪ alix: time for bloomberg first take. we are going to give you the news. you get the trade and analysis of the markets. sassower,e is damian vincent cignarella, and also with us is maria vassalou of vassalou capital management. vincent, i set up the whole show on what is going to win. is it going to be central banks or trade? vincent: i think it's trade.

i think we are going to see the usmca developed, and how nancy pelosi wants to put a stamp on that. this is a republican bill. this is the president's deal. the talk from washington is the house wants to try to get their fingerprints on the stomach it looked like we were a part of it so they won't give the president a total win. they can't stand in front of it if the president takes it to mexico and canada and it is on his desk, waiting for it to sign. the second part of the deal is the tariffs on the 15th. half of the street think he's going to postpone these tariffs. some think if he gets the usmca, he will play tough guy and hold china up with this. this is a little bit tricky how that one goes. usmca is a little easier to read. china is going to be difficult. bigan: it's a pretty deal, certainly for mexico. afl-cio finally said we have

some resolution there. it looks like they will pass it today. for me, it is actually the steel provisions which i need to do a deeper dive into to see what that really means for mexico, but it opens the door to really stimulate its economy. we expect more rate cuts ahead. maria: i think in the case of trade, the question is whether we are going to get a phase one deal. that is really what is going to determine whether we are going to get tariff increases on the 15th or not. even if we don't get tariff increases, we may still not get a phase one deal because the chinese want to roll back the existing tariffs. alix: i feel like the question for me is what is in the markets. where the peso is concerned, everybody is like, totally. we will see a nice rally off of that. but where canadian dollar is concerned, it is not really going to move. damian: it doesn't mean the fed is not still important. if you saw yesterday, credit suisse came out with one of its

pieces that people were going gaga for overnight. with scores so high for the big banks in the u.s. and excess reserves so low, we will see some blips coming into year end, certainly in fx swap markets. zoltan is basically calling for short-term rates to rise into year end, so that curve will invert and tie up a lot of treasury funding and the overnight market. alix: i love that guy. we will try to get him on tv to talk repo. vince? vincent: i feel like we've been having this conversation for the last 40 years. oppenheimer in the 1980's said you americans are stupid. when you see this situation happening every year, why don't you borrow in the one year and lend in the one-month and three-month where everyone needs the money, and then you make money on the curve?

why does everyone wait until year-end? i don't get it. damian: because banks are inefficient. maybe there's some loan tucked in the top drawer that they didn't find out about until the end. vincent: it is like sticking your finger in the socket. it happens every year. somebody should be able to sit down and figure this out it's just not new. alix: maria, what do you think about the whole repo argument? maria: i think since the rules have changed in terms of how they account for risk capital in the banks, there's and i love -- there's a lot of functionality in the repo market. they are just creating liquidity issues in the market. the hedge fund industry in particular traits far lasts now than they did in the past, so you don't have that per dissipation in the market. --damian:e never had

we never had a year-end where it looks this low, so i see where fear might be built into the market, but certainly if we have dips,ed plumbing things can get hairy pretty quick alix: here's what i don't understand -- pretty quick. alix: here's what i don't understand, vince -- vincent: they can fund their banks locally so they don't have to come into the swap market. we are at negative yields in the ecb. alix: this is my whole point. who cares? we know they are going to fix it. if we know we are going to fix it, we know it is going to be a problem, we believe that it is , so really, where is this ignatik and's? -- where is the significance? maria: it is not a big issue for me. this is not one of the top issues that i worry about.

they are going to fix it. it is not systemic. it doesn't mean that there is something fundamentally wrong with the system. vincent: i totally agree. if you are on a trading desk, it hurts. but from a systemic issue, it is not a big deal to me. alix: i just want to get your take on what is happening in the u.k. did you guys see that interview with boris johnson? i mean, that was pretty special. damian: did he get his phone back? [laughter] alix: he did get his phone back. are you going to fade anything you see? vincent: i totally think this is buy the rumor, sell the fact. i think this is a lot closer than people realize. one in six voters are undecided. four out of six say they can change their minds. people will vote not along party lines, but along leave-remain lines. no one really knows how that spreads across. it could fall anywhere. if it is spread too thin and the

tory leadership is too narrow, you have a hung parliament. i wouldn't want to belong sterling on the back of this. maria: it's also, the last few election cycles, polls haven't been very good at predicting outcomes. we have to be a little bit careful. even if you get a majority, it doesn't mean he will be able to push through a brexit deal. you still have to get it done. that point, the question is where do we see cable go? where do we see gilts go? if it is a hung parliament, do 1.28 toable fall below 1.25? vincent: if you look at the positioning, a lot of people are talking about the skew long puts on sterling. that, to me, isn't a bet that sterling is going to drop necessarily. that means the market is very

long cash, and they are buying puts to hedge against that cash. that may says the asymmetric risk to the downside is going to be a lot more punishing than any potential upside. alix: so rounded out with the fed. how do we care about the fed this week, with all of this other stuff going on? maria: well, i do care about the fed because it is the only game in town. [laughter] i get how, not why, to be fair. maria: they will come out and say they are following developments. there are a lot of risks to the downside and a lot of risks from abroad, both from the developed markets, but also emerging markets. the fed has a lot of external risks to worry about. we want them to a knowledge this -- to acknowledge this and show

that they will be patient. what i expect the fed to do going forward is follow ecb to a certain extent because if you look at where the fed is in terms of how accommodative it is relative to ecb, they are not really accommodative. so we should be former loose at the fed. the fed is just about right right now. alix: oh boy. vincent cignarella and damian sassower, thank you guys. maria vassalou of hussle capital management will be sticking with me -- of vassalou capital management will be sticking. with me. . we will have full coverage of the fed rate decision. coming up tomorrow. any chart we use -- we will have full coverage of the fed rate decision coming up tomorrow. any chart we use throughout these two hours, find them on gtv on your terminal. with this bloomberg. -- this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak."

morgan stanley is eliminating about 1500 jobs in a year-end efficiency push. the cuts mainly affect technology, but also executives in sales, training and research. starbucks ceo kevin johnson could be in for a big payday three years from now. the board could pay him as much as $50 million in cash. return for than three years ending in 2022 must exceed at least 80% of s&p 500 companies. over to the u.k. the crisis getting work for fashion chain ted baker. the company is suspending its dividend. ted baker is having its worst year ever following a scandal work placeunder's behavior. that is your bloomberg business

flash. alix: another story i am watching today, the rising optimism among small business owners in the u.s.. my desert indicator. i love looking at it. sentiment rose by the most in a year. the nfib also talked about more owners saying profit trends are looking up. they say it is a favorable time to expand. u.s. small business earnings jumped by about 10 points last month to 2%, the second highest level on record. the only areas that posted weaker readings were plans to build inventories. bankg up, a central bonanza this week, including brazil interest rate decisions. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i'm alix steel. we are waiting for the fed, waiting for the ecb, and waiting

for trade. also the usmca. can it actually get pushed through in congress? 0.3%.tures down by about if you was like some of the optimism is coming out of europe, even though i am getting analyst note after analyst note about how europe could surprise to the upside. investor sentiment a little bit better. hitnight, the 10 year jgb zero, and then into negative territory. , 19 basisens spread point is where we set. about $24 billion coming at 1:00. in the currency market, we are all watching the upside in the cable rate. we have two days to go until the election. we have rate decisions from global central banks, not just the fed and the ecb, but also emerging markets. brazil on deck tomorrow. decotelli,is oscar

and with a still is maria vassalou. what is the room for the central back to help stimulate? oscar: i think there's not a lot of surprise for what happens tomorrow. everyone expect another 50 basis cut. is brazil really doing the homework of becoming one of the lowest real rates in history, and that is going to impact a lot of private equity investments. certain infrastructure investments in the past five, 10 years are not funded because there are not sufficient real rates there. that is going to impact the economy in a way that we start weing jobs coming back, start seeing opportunities to invest. in the private world, we are seeing a lot of opportunities happening. we have an interesting ipo this broker in thel

fintech world. we just had one of the largest brazil banks that did a private deal, and that is going to be a 5x for them. we are seeing a lot of interesting private deals happening in a moment where the market is not really looking towards private investment in brazil yet, or in latin america in general. alix: how do you look at emerging markets versus developed markets central bank, in terms of who has room to cut, where stimulus will come through? maria: i think it will be very dangerous for central banks in emerging markets to cut from here because emerging markets have significant amounts of dollar-denominated debt, so every cut hurts them in terms of refinancing this debt, servicing this debt. if anything, central banks in brazil or other emerging markets should be wishing for the fed to cut rather than looking for room

for themselves to cut. oscar: i think we seen a big surprise this year because we were expecting the dollar to be a little bit weaker, and we saw quite the opposite, the dollar very strong. i've never seen in my whole career local fundamentals so strong, especially in brazil, and with such a weak currency. i thing we are going to start seeing flows of money coming in, or fundamentally, we are still going to see this whole world in a crazy moment with negative interest rates in $17 trillion, and i think we see this unstable scenario that we are living in right now may be survive about a year or a year and a half. it needs to change. maria: everybody is talking about the fed cutting interest rates, interest rates being very low, but actually, if you look at the neutral rate, where it is, where it is estimated, it is estimated to actually be below .5%.most estimates, around

if you look at where the shadow rate is come over the neutral rate is, the fed is not particularly accommodative at this point. that is why the dollar is strong. alix: so my question is twofold for both of you. in terms of brazil and the money we have seen in successful inflows, particularly versus other latin american equities, how much of that is sticky and confidence in brazilian growth versus the search for yield? oscar: it is still very little flow from international capital. it's been basically local money buying the stock exchange. i think we are going to start seeing the outcome of the local reform. i think the monetary policy has been done. it's their. we can see the results of that. but now the structural changes like the fiscal reform approved this year, we are starting to see now. we need to see reduction on the total debt level with privatization.

that is going to roll out toward 2020. then i think flow of capital is going to start to come. alix: do you feel that brazil can escape the wave of protests and unrest we have seen all across latin america, chile and ecuador? oscar: i think so. i think the protests have become, in a way, global. hong kong, france getting into situations where the youth's to come out and discuss how the government needs to change. done iswhat needs to be policyary policy, fiscal doing its homework to have a stable economy. if we don't go towards that route, i think we kind of just out in terms of the last few years. maria: i think of all of the years since the financial crisis , there haven't been the

structural reforms that needed to happen. there was a lot of capital that flew into emerging markets because of the search for yield. now they are in a situation where as soon as the fed started raising interest rates, capital started flowing out of those markets. they are very dependent on fed policy. . oscar:oscar: i think one thing to add is there is still a mitch match -- i think one thing to add is there is still a mismatch between public and private markets. when you look at private debt, we still have private debt issuances with 1000 basis points. when you look in regards to what the stock exchange has been priced at versus private deals, i just gave the example of a 5x deal, there is still a lot of that we are not seeing in countries that have done their homework. before we actually see a big

flow of capital going towards private, i don't think the party is over yet. alix: oscar, so great to catch up with you. thank you for joining us, oscar decotelli of dxa investment. maria vassalou of vassalou capital will be sticking with me. we want to get a first word news update with heavy on art auto. -- with viviana hurtado. the afl-cio leader is now in favor of usmca. u.s. trade representative robert lighthizer, house speaker nancy pelosi, and the mexican government are hammering out this agreement. up to 14 people are now feared dead in the volcano eruption off the coast of new zealand. six people are known to have died. eight others are missing and feared dead. they have seen no signs of life. other two sydney, australia,

where air pollution from bushfires is so bad it is setting off fire alarms. the number of people seeking treatment at sydney hospitals rising. the government warning people with respiratory conditions to stay indoors. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much. coming up,. more bank layoffs. . morgan stanley said to be cutting more jobs in its workforce. if you have a bloomberg terminal, check out tv . watch us online, click on our charts and graphics, scroll through if you miss anything in the conversation. this is bloomberg ♪ -- this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." record ipo,'s barely any of its stock will trade when it debuts this week. in the offering, the saudi oil giant sold a 1.5% stake. that proportion of stock that can change hands is among the lowest globally. many of the world's largest companies have more than 80% of their equity owned by independent shareholders. over to south africa, where state run toro company s, -- state run power company eskom stepped up blackouts. it could get to the point where customers have electricity for only half of the day. eskom is struggling under a massive debt load.

son isnk's masayoshi some likely to sell alibaba stock in an attempt to bolster softbank shares. softbank is down 28% since a peak in april. for the year, alibaba is up 48%. alix: thanks so much. we turn now to wall street beat to cover three things wall street is buzzing about this morning. first up, the go to bank ceo says the firm is prepared for a prolonged low rate environment. we've got morgan stanley cutting 1500 jobs. and women in hedge funds. we will take a look at the challenges faced by women led firms. joining us is bloomberg's sonali basak. want to start with deutsche bank . we talked to the ceo earlier. here's what he had to say. christian: i think we have taken

a conservative outlook on interest rates. therefore, in this regard, we also changed our underlying planning. i think we have lower for longer as part of our overall plan. therefore, we are prepared for that, and we need to adjust in this regard our business model and what we do in july. alix: what did you hear that was surprising? sonali: not too much, honestly. the negative interest rate environment, at what point are they going to start really passing those costs off to investors and clients is really the biggest question. germany is silly really -- germany is in a really interesting place in the larger european market. deutsche is right at the center of that. it will be a very interesting tension to watch. alix:alix: which also goes to what happens in germany in general. there are some calls for the economy to actually surprise to the upside, which would be great

for deutsche bank. but if we get into recession, what are you going to do with that? sonali: andy good who -- and you get into a political problem here. alix: our second story is morgan stanley. this broke yesterday, still superhigh on the bloomberg. cutting these jobs, was it defense or offense? sonali: it is definitely defense. morgan stanley is coming off of a pretty good run. they bought in about $5 billion in that business last year. even though morgan stanley is cutting about 2% of their workforce, you can still make money if you were heads. watching that happen i think will be very interesting. if they start to invest more in technology, people say you can do both. you need the people and you need the robots, but can you generate more revenue with less people? alix: let's get to our third story, where we focus on women on wall street, moving and shaping the world of finance. today we take a look at hedge funds with maria vassalou,

capital management, currently in the process of raising funds for her own hedge fund. what was it like to strike out on your own? maria: i was with weinberg for six years. the moment was right to make this move, and in discussion with my investors, we decided that it made sense to move ahead. sonali: do you believe right now, for all the talk of money pouring in, and you are speaking at an event later today on diversity for hedge funds, for all of the talk, do you believe that the talk is turning into action yet? toia: first of all, we have allocation should be going to high-performing managers, independent leah whether they are women, men, people of color. on the other hand, there's a lot of talk about diversity inclusion in such efforts, especially from the public pension plans. we don't see the action. there's a lot of talk.

there isn't necessarily the action. quite often, the action contradicts the talks. sonali: we had a similar event last week in private equity, women in private equity. the numbers are not great there. they are really not great in hedge funds. has anything been changing to promote more female hedge fund managers? is that perception of the --er-masculine, moscow== hyper-masculine, macho trader still existing in what you need to manage a hedge fund? maria: i don't think that is what you need. i think you need to be coolheaded, to be able to risk manage tough situations. you don't need this hyper-masculinity to do that. i think all of the research has shown that women can perform at least as well as men under pressure, and actually, they have been shown to do better in

terms of risk management in certain situations. alix: what is it like to try and get money right now? maria: it is a tough environment for everybody. but because it is such a tough environment, allocators also need to protect their own career in a way. there is a sense that it is much safer for them to allocate to big managers then to allocate to smaller managers, so there is a little bit of this going on. but hopefully those who perform will be able to grow. sonali: you are going against the grain quite a bit here. there are more funds closing then starting up. is that helping in any way, the fact that there are fewer funds these days? maria: i wasn't looking at the statistics really when i made the decision, but my driver was the encouragement from my investors, and also the circumstances that were arising.

it is great to be in a position to really run an organization in the way you think it should be run. as a small manager, we can better align our interests if of the investors, be much more flexible, and focus on things that are important. macro isnterestingly, having a tough year as an asset class. how are you differentiating yourself? we can't speak specifically about performance, but one of the things we had is that on though inflation, we have done a lot of research on. what we have found is that there have been structural changes in the economy over the past 10, 15 years with globalization, with digitalization. there are actually disinflationary forces in the market, so it is very difficult to generate inflation.

we have been in this low-inflation camp that has paid off. sonali: something important that people forget about you is you are a quant by trade. that is a really interesting thing to be in a macroenvironment also, and also, frankly a male dominated industry. i've been learning quantitative finance as well. how are you finding those skills are helping you now, given you have gone through the process, gotten the phd? maria: i think they are very useful because we live in an increasingly compex world. as a lot of comp >> information, a lot of information -- a lot of ofplex information, a lot data you need to process. so to create a repeatable process where the risk management is embedded in it, i think that is necessary in this world that we live in. alix: when you are building a and, how do you do that

stay diverse, but also deliver returns? what is best practice for you? maria: i build my team over time , and it is very diverse. we don't have two people from the same country or same background. youat the end of the day, build the team with people who are passionate about what they are doing, committed to what they are doing, and where there is a good culture and good communication. alix: really great to spend the hour with you. sonali, thank you as well. maria vassalou a vassalou capital, good luck. the u.s. consumer still has enough consumer to -- enough income to drive growth. we will take a look at it in today's trader's take. if you are headed into your car, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business at. this is bloomberg. ♪

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alix: time now for trader's take. joining me as vincent cignarella, voice of the bloomberg audio sqawk. listen to them all day by typing in squa . vincent: with cpi numbers ahead of the fed, this is a number i watch really closely because it is real disposable income. when you want to watch with the consumer has in its pocket, the ability of the consumer to still drive the economy, it is about real earnings. while everyone is looking for inflation to pick up my kind of have to be careful what you wish for. inflation detracts from we'll links -- inflation detracts from real earnings. it does limit the consumer's spending. this kind of surprised me, how closely attracts the dollar. i think the dollar is kind of peaking, and may drift off next year. we have a president who would like a lower dollar. another careful what you wish for. a lower dollar drives up consumer inflation. it is a far more closely

correlated thing that i actually thought. i thought this took years to come into place, but when you look at it on the chart, it is almost a coincident issue. if we do get a lower dollar and 2020, if we do not get wage increases, we will see a decline in disposable income. that should weigh on both consumer spending and covert earnings. alix: i knew you were glass half-empty. i could feel it today. bloomberg's vincent cignarella, thanks very much. coming up on this program, mark mccormick, td securities global head of fx strategy, along with david kostin, goldman sachs chief u.s. equity strategist. this is bloomberg. ♪

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december 10. i'm alix steel. here's everything you need to know what this hour. let's take it from the top. bushfire smoke sets siege to sydney, setting off fire alarms and setting off -- and signaling health warnings. >> these fires have been going on for months now, not just weeks. alix: 6.7 million acres of land have been burned so far this bushfire season. >> the nhs is in crisis. what is your response? it's a terrible --pm johnson: it's a terrible photo, and i apologize to the families, but -- and one doing is the whole, i think patients in the nhs -- alix: rough day for boris johnson. the labour party is creeping up to a point where a hung

parliament becomes a real possibility. >> we have taken a conservative outlook on the interest rates. therefore, in this regard, we also changed underlying planning. alix: deutsche bank's ceo warns that its midterm profitability goal looks optimistic because of its expectation for interest rates. >> he thinks to fix trading revenue and investment bank revenue will grow overall this quarter. alix: the bank promises to avoid a capital raise as the ecb reduces its capital burden for g shrinks and sewin the bank. president trump's administration plans to sign a trade agreement with the u.s. and canada. pres. trump: hearing great things from unions and others that it is looking good, so i hope they put it up to a vote. alix: trade representative robert lighthizer and advisor

jared kushner will travel to mexico city to finalize the changes. rep. nadler: if the president puts himself before the country, he violates the president's most basic responsivity. alix: house democrats prepare to unveil two articles of impeachment against the president, one on abuse of power and the other on obstruction of congress. >> it is outrageous we are trying to remove a president with a kangaroo court like this. alix: the leaders of the committees running the impeachment will unveil their next steps at a news conference scheduled for 9:00 a.m. and what is going to leave the markets? trade, central banks, or the u.k. election? s&p futures moving lower, down 0.4%. the real concern is will the tariffs this coming weekend get implement it on chinese imports? buyt by the rumor -- is it the rumor, sell the face on the

u.k. election? going me as mark mccormick, td securities global head of fx person, not on the phone. what do you think? we are notnd of know going to see any escalation in the tariffs. we will not see the tariffs slept on china. i thing the most critical thing for the euro or european periphery currencies is the sterling. if we have a clear majority for conservative government, we know what brexit looks like. we can reduce uncertainty. it is not great for the u.k. economy or productivity, but we can at least remove some of the uncertainty which has been clouding the european currency landscape for quite some time. alix: zero growth i think is what we got for the u.k. in the third quarter. the average s&p target is actually trailing the index

performance by a pretty wide margin. is that going to happen again in 2020? to answer that question is david kostin, goldman sachs chief u.s. equity strategist, who sees the s&p at 3400. love to get your call. walk me through what your call is. david: basically, the economy in the u.s. is going to be growing pretty strongly. we are looking probably around 2.3%, close to 2.5% growth next year, well above where the consensus is. the way to make money is to be investing and have a view that is different from consensus, and have consensus move towards you. so broadly speaking, a more up to mr. view on overall activity. that is what drives earnings. earnings have been growing around 6%, a little higher than nominal gdp. so includes the benefit of some buybacks. in the uncertainty that you have as a result of the election will be resolved. the most probable outcome is that it will be resolved in a divided government.

if you want to summarize my outlook for the year, it is basically united we fall, divided we rise. the idea of a divided government is the u.s. equity market generally does better, outperforms better, in an environment where there is a divided federal government. without thinking about the actual outcome of the election, you're going to have a divided government that is more tub with roughly a 10% move from the current level. that is the basic idea. the economy is going to grow, earnings are growing, and you get expansion on the back of a resolution of uncertainty. alix: what do you think, mark? mark: to tie this back to the fx market, the u.s. equity market is one of the things people do not focus on. i spent a tremendous amount of time talking to people, and they want to talk about central bank's. the bulk of what is driving currencies is riveted -- is relative equity flows.

sharpe ratio in corporate bonds and u.s. equities has been pulling flows back into the u.s.. we have seen u.s. investors cutting exposure to everything else in the world. i think it is important to thing about the fx market because if this view is consistent, how do global equities, chinese, european equities look compared to the u.s.? it is not getting a lot of airtime. alix: i feel like it is a value trade. is that what it boils down to? a value trade because the dollar is extremely overvalued. onhave not seen the dollar our slower moving fair value models since 2016, which basically brought us to a big uptick in global reflation. prior to that, we haven't seen on our tracking models the strength of an equity signal in the dotcom era.

we can focus again on the twin deficits if the global story looks a little bit better than the u.s. and the equity flows start to rivers. i think that is why it is critical to thing about u.s. stocks, u.s. value, u.s. flows versus europe and asia. alix: i know you are a u.s. equity strategist, but how do you view that, as in the value trade either global ex-u.s. versus trade within the u.s. market? david: a couple of ways to think about this. from a pure accounting perspective, really what is happening in the united states from the end, the net final demand for most of the consumer, is really the more important thing from an equity investor perspective compared with the fx market. but you asked a question about growth versus value, and how you want to thing about that. the strategy we advocate for for 2020 is basically a combination of both. the reason is as follows.

the dispersion of valuation, separation of pe multiples, is externally wide. historically, that is consistent with value strategies, value stocks outperforming. however, in an economic growth environment, it is more mediocre. call it 0% to 3%. growth stocks do better. on the one hand, the starting point of individual security valuations is value. the accomack values has growth. growth on ahe reasonable price. they are not valued at extreme one direction or the other. so you have lucky barton, alphabet, some big companies -- you have lockheed martin, alphabet, some big companies that are the best growing stocks in their sectors, but aren't at the extreme valuation tales.

in 2020, the valuation arc it is should as any -- lua market is already at a reasonably high level. view, client point of hedge funds, mutual funds, what of the long stocks in all suckers -- want to be long stocks in all sectors. the way to look at it, each sector has opportunities within growth editing reasonable price -- growth at a reasonable price. alix: what would reasonable price be in the fx market? low yielding em? mark: i think the growth story is a mix. for currency world, you've got cc --nk of you've got to think of carry, growth, risk. what we are trying to do is look at his data good or bad.

if data is good or bad, economists tend to change their biases. that moment and provides a very good framework for understand whether currencies are seeing relative growth moment. pmi's do a similar thing. but the critical argument is if you look at the dollar versus the rest of the world, the growth momentum has been on the u.s. dollar side since 2018. what we are seeing now is the growth story has come back to basically neutral. if you unpack all of the things that should matter, global growth moment them, geopolitical uncertainty, currency valuation, and the relative global central bank, all of those factors are leading to a world where if we don't get a resolution of all of those factors, the stories of the rest of the world start to grow again. that is important for currencies. u.s. equities could probably outperform, but is positioning in u.s. equities too high relative to the value in europe and asia? the growth story is in the u.s., but there are relative deltas.

growth momentum could be outside of the u.s. year, at least from a standpoint where the dollar is overvalued, and we have seen the dollar move because people brought money back to the u.s. alix: i think i've seen at least four reports the past few days talking about europe surprising to the upside. david kostin of goldman sachs, mark mccormick of td securities, you are sticking with me. coming up, optimism on the rise. more business owners say profit trends are looking up. more what that means on my desert island indicator. if i was on a desert island, i would lengthy nfib with me -- i would want the nfib with me. this is bloomberg. ♪

alix:alix: tune in, 10:00 a.m. house speaker nancy pelosi will make an announcement on usmca,

the trade agreement with mexico and canada. i told you as my desert indicator, the nfib. you have a lot of optimism coming into the market. sentiment rising by the most in more than a year. joining us here is david kostin of goldman sachs, as well as mark mccormick of td securities. david, the reason i want to bring this up and talk to you about it is because the peak margin conversation is one i feel like has been in the market for years, and you did a note the talked about the difference of how to look at peak margin, basically looking at the type of margin you are looking at. walk me through it. david: the idea is the macroeconomic data from the federal government, the national income and property, suggests margins are declining. when you look at individual companies on an accounting basis, that is not consistent. you can look at what is happening with the s&p 500 in terms of large-cap, go to the mid-cap, small-cap.

we find that the largest cap u.s. companies, their margins have been increasing pretty steadily this entire cycle. in particular, they have the benefit of the impact of lower tax rates from the tax law change. there's about 800 basis points in decline in the effective tax around 18%.6% to we find the biggest cap stocks, margins are rising, get the economic data is suggesting some macro government level data is falling. we find it is premier league concentrated within the small-cap stocks as opposed to the bigger cap stocks -- it is primarily concentrated within the small-cap stocks as opposed to the bigger cap stocks. alix: does that feed into the argument where only a few stocks are leading the rally, and it is all concentrated in a handful of names? david: the rest of the market is reasonably close to average, not particularly narrow. it is pretty average.

for would be the argument why we would not be so concerned about it. the very simple argument is that the u.s. economy is beyond full employment, the lowest in 50 years, and probably going lower over the next several years. that is going to fall toward something in the order of 3.1%, which is extremely low. as long as the job creation still remains pretty powerful, that leads to better economic activity, better earnings, and that is what will ultimately take the margins higher. that is likely to draw more flows within the u.s. as opposed to the markets. the idea is you have a better sharp ratio trade compared with other equity markets. ,here may be lower valuations but from evaluation relative to the business activity, u.s. is soh better, margins are much higher. tech margins are more than 20%, and likely to say around these levels.

the forecast is basically margins are based around flat levels, but they are unlikely in our view to decline in 2020. mark: do you guys take into account market positioning or any sentiment indicators? drawdown potential, certain sectors that look lopsided, anything like that? david: we do that. we look at positioning across 14 different metrics. you combine all of that to a sentiment indicator. we are basically stretched, not expert nearly so, but we are at a sort of one standard deviation greater than average. why is that relevant? it is more relevant and powerful on the low end, when people are narrowly positioned in the market. that suggests there's a powerful rall over the coming months. clear, isto be very the s&p 500 will end this year around 3250 rise to

in the first quarter on the back of still strong economic growth. that is consistent with the idea of business getting better. then uncertainty around the election, where most of the market will bounce around 3250. at the it of the year, you will have a -- at the end of the year, you will have a divided government and the market will rise to 3400. the tax code as we currently see it will still be in effect, and that is a key point. alix: are you guys kind of saying the same thing, but just expressing it differently? would that be accurate? mark: the way we look at growth, it is not levels where we look at 2% here, 0.5% here.

on a year-over-year basis, has germany gone from something collapsing into more positive? you have to take that into consideration with momentum and yield curves, and the market sentiment. our positioning indicators do the same thing, where you look at positioning as a function of risk reversal, implied volatility, beta-2 performance measurement, and we throw in technical signals. essentially when positioning goes long, you buy it. then you have a signal around 1, 1 2.5 times standard deviations. what we see is the dollar is back to neutral, so we have been long the dollar about a year and a half now, and growth limit them as been there. the corporate tax repatriation was huge for the dollar.

the point that is really relevant, do u.s. investors and global investors, japanese, europeans, asians, do they see more value in potential steepening yield curve on the fixed income side? do they see more value in bringing equities home? they are in europe, and japan, and in asia. those are the ones that are the net marginal savers or funders going into parts of these u.s. assets. the yield curve starts to steepen in germany largely because no one ever thought they would have a fiscal stimulus package, or europe can get its growth story together, or japan ak around holding the 10 year at zero. the financial stability concerns around the monetary policy stance we have right now is one where, if we have steeper yield curves, we just don't have -- we just have all of the money leave these countries.

they can come back on a fixed income side, and the equity flows would be consistent with the growth story, the marginal driver after the yield. alix: final word to you, david. you outlined what your 2020 outlook is. what is the risk? was the thing that totally shuts down what happens? david: the risk would be a unified government, for one. uncertainty regarding antitrust and regulation. there's a lot of bipartisan support on the democrats and the republicans for initiatives with regard to social media and some of the technology companies. they have been the drivers of the market, important contributors to some of the returns of the overall market. that is an issue and concern. trade, although trade would seem pretty close to some resolution. how you want to define that resolution remains to be seen. you have questions about the policy uncertainty, but really, i think the antitrust, government regulation and scrutiny would have potential impact in terms of lowering the

revenue growth rates and lowering the valuations. we have seen that in the past, and the case of at&t, ibm, microsoft. when the government, whether it is to partner justice, federal trade commission, the applications of that is that -- it is the department of justice, federal trade commission, the applications of that is that it will have an impact on overall returns in the market. alix: david, always good to catch up with you. if it cost of goldman sachs, good to see you -- david kostin of goleman sachs, good to see you. coming up, your desert island indicator. we will talk cable coming up. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." ceocuts by deutsche bank's are paying off.

for the next year, his main regulator reduced its capital burden. christian sewing rolling back years of aggressive expansion. it may ease concerns to pay for the overhaul. deutsche's will need to sell new shares. the british economy and expect at least agnate it for the first ime since 2009 -- economy unexpectedly stagnated for the first time since 2009. some of it is blamed on bad weather. that is your bloomberg business flash. alix: mark mccormack still with me. we already take the -- we already talked about the cable rate, but what is the trade? mark: i think you are long sterling for the next two days. i think that's the point where you can start fading it. there is momentum. positioning is neutral. ,terling is running really rich at about a 2%, 3% premium.

what we are trying to do is reduce the tail risks around brexit come the slow-moving story. there are people letting hedges rolloff, which is letting it naturally move higher. the four to six week trade is to sell it. i think that is the optics, where we've been talking about a lot of technical macro place. that is what people are trying to work around. what is the next move? to 1.34, get 1.35, you sell their. alix: coming up, women in private equity. very few have roles at the top of the biggest firms, and carlyle is trying to change that. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. checking in on the markets. central bank and trade and u.k. election.

equity futures down .1%. off the lows of the session. the dax also off the lows, down 1%. better investor sentiment. in other asset classes, exciting overnight. the cable rate up 2%. the curve going nowhere. the three-year yesterday had pretty solid demand. talking about trade, you've president trump administration planning to sign off on a trade deal with canada and mexico, easing the path for a vote in the house as soon as next week and president trump is sounding optimistic. >> hearing very good things. i'm hearing from unions and others that it is looking good and i hope they put it up to a vote and if they put up to a vote is going to pass. a lot of democrats want to pass it. i am hearing a lot of strides have been made over the last 24 hours with unions and others. alix: mark mccormack is still

hanging with me. what is priced in? mark: for the canadian dollar i think usmca is a nonstarter. it could broken decline significantly if we did not see the trade deal move in the right direction. mexico is probably the better play because latin america has been beat up in the last month. there are currencies like chile and brazil and argentina doing different things. usmca is probably more beneficial for mexico than canada, but it is not a huge market event. we are going back to the status quo. this was a man-made argument around whether or not we should be pulling nafta apart and redesigning it and discussing it. the uncertainty around whether or not we would have a deal and have it implemented. last year what shock value whether this could get executed and now we are at the implementation phase there is nothing for markets to trade on. extrapolate that to

general trade, good and bad headlines? can we use the same argument? mark: i would say you have to think of macro versus idiosyncratic risk. market a north american that is idiosyncratic to the north american supply chain. it could get businesses moving aren, but maybe if you talking about global sentiment around trade tensions, you've gone from the escalation period, maybe we need to celebration. that is important because what we have lived in for the last year is a negative feedback loop of trade uncertainty, global growth slow down, and keeps going. if usmca is now one step in the right direction, something gets done and we remove uncertainty, so maybe the geopolitical uncertainty index starts to improve more here. that is what most people are doing, taking nuggets of the process and assuming that as we get closer the u.s. election it

is less likely we get more uncertainty around trade. alix: where is the best place to play the upside? we are seeing a handoff of some sort from monetary policy to fiscal policy. now the biggest things that are disjointed is latin america versus asia. you have the growth story but you also have a risk premium. if you look at positioning related to all the things we talked about previously, market positioning, better performance, chile, brazil, all look cheap on those metrics and you can see that in the price action with the uncertainty around politics. on the other side, singapore, taiwan, those are running at a premium. if you're planning the world is healing and things are mispriced and there is positioning that needs to be readjusted, it is a -- underweight asia in the fx space. alix: i love having you on set.

move back to new york. mark mccormick of td securities. we want to give it update on what is making headlines outside the business world. viviana hurtado is here with first word news. toiana: house democrats plan unveil two articles of impeachment against president trump. it will be accused of abuse of power and obstruction of congress. the president could be impeached by the republican-controlled senate is almost certain to acquit him. 14 people are now feared dead in a volcano corruption off the coast of new zealand. six people are known to have died, eight others are missing and feared dead. aircraft flying over the volcano have seen no signs of life. here is another way where men may be gaining an advantage over women in the workplace. smokers are promoted faster than those who do not share the habit with their boss. according to a paper from the national bureau of economic

research, the study showing men benefit from having a male manager. women have the same promotion rate regardless of the gender of their boss. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. alix: we have breaking news. the dow jones is reporting that the december tariffs will be delayed. u.s. and chinese negotiators are planning for a delay of the december 15 tariffs that were supposed to come on this weekend. markets moving, reversing any declines from earlier. s&p futures spiking and you are seeing the yield and the 10 year back to 1.82% and the dollar and the yen moved to the highs of the session. that is the breaking news from dow jones. reportedly those tariffs will be delayed and pushed back. we will give you updates as we go. we are seeing markets on the move. i want to highlight diversity in

-- when itce, it comes to private equity it is still a man's world. only 8% of senior investment roles globally are occupied by women and the numbers slowly rising. one firm leading the change is the carlyle group. women oversee more than 100 billion dollars in assets and we are joined by one of the people charge of diversity at carlisle. cara hollander. also with us is bloomberg's sonali basak. we all know we want to have female managers, but how do you get it done, what you do behind the scenes? kara: there's a number of things. one is you have to be intentional about it. it does not happen without focusing effort on it. at carlyle group, part of the reason we have half of our assets under management managed by women is because we started

in 2013 with a diversity and inclusion counsel, one of the first in the alternative industry. it is cochaired by our co-ceos. the people know this is important. 17 of our most senior leaders sit on that. more importantly, each of our funds and functions have developed a specific diversity and inclusion plan that targets one of the most important issues and opportunities for that group and that it helps us with tracking progress and accountability. notother thing is it is just about bringing in diverse professionals. that is obviously critical. but creating the environment where people can thrive. that is a big piece of what we are doing. we recently launched something we call better decisions. it has two pieces. one is how do you equip people with the concrete actions in their day-to-day to help foster an inclusive environment? and how do we begin to change

some of our processes and our systems to be more inclusive, to help people behave as they intend to behave. sonali: something i think is interesting is when you are focusing on diversity and inclusion, it is not just within carlyle group, you spend a lot of time talking to investors and i wonder what the conversations look like. conversations are very interested in the discussions. one is for themselves. what are some of the best practices we can adopt to make sure we are as diverse as possible? the other piece is how do we use our influence? how do we make sure we are evolving this for the industry through the kinds of questions we are asking, the kind of decisions we are making. i would say we extend this, we are focused on this because we do believe this helps us make better decisions. after all, we are in the decision-making business. sonali: what has taken so long?

every time i meet a woman when i cover the industry i get excited because most of the people i cover are still male. it has been taking years. he started this in 2016 and it is 2019 now. the numbers are pretty stark. kara: the numbers are stark. what we show is with the intention you can make progress. year-to-date, we have over half of our hires are female, 47% in the u.s.,ties so with intention you can make progress, but those are the outcomes you want to see. you areso making sure intentional about steps in the process that are important. we have made the goal of having at least two diverse individuals interview for each of our open roles. if that is not possible, the hiring manager has to show they

took credible steps to cultivate that diverse light. you start making sure you're doing the right things along the way. alix: but i also found interesting when we were speaking on the phone's you also help unconscious bias. if you're biased, it is easier to address, but his is the unconscious bias we are up against. how do you deal with that if there is a meeting going on and that needs to be addressed? kara: a great example is we just went through promotion season. the promotion committees were deliberating and we gave them very concrete rules and information to help make sure that discussion was as objective as possible. it started with a high-level overview of how bias can influence performance evaluations and included setting a norm within those committees that we were going to help each other be as objective as

possible and call out if we suspect a bias might be entering the conversation. what are the words you might hear that would be triggering that might be an indicator? the importantly, what are ways in which you can raise it in a productive way in the conversation? it is tangible information. sonali: that is an interesting thing. people do not love being called out in this industry. how do managers react to that? how do you facilitate those conversations so one manager can tell the other one maybe they are not thinking about this in the right way? people want to do the right thing. group that is true and increasingly true in society overall. it is helpful to give people the tools they can use to act on that intention. here is how you can raise the

question if you suspect it might be happening in a conversation, and in a way that is productive rather than shutting people down. alix: to wrap up the conversation, talk about carlyle group's goals and making sure you hire but also making sure you are investing in women and diverse companies? kara: that is an excellent point. our intention in our work is carlyle group itself, but our vision is to work for our portfolio companies as well. we believe this generates better business outcomes. within our a goal private equity portfolio wordsies to have diverse and all of our majority companies within two years of our ownership. that is the ball we have said globally. i can tell you we started -- that is the goal we have set globally. we started with over 40% of

boards being diverse to over 80% today. had the buyout fund goal -- they started with the goal of having one diverse board member on each board. they have now extended that goal to two diverse board members. alix: great stuff, good conversation. cara held lender of carlyle group. sonali basak, thank you as well. want to recap the breaking headlines. u.s. and chinese negotiators are planning for a delay of the december 15 tariff. not only delaying the new tariffs that could have come on this weekend, but also talking again about cutting tariffs. china wanting some kind of bone to be thrown to them in terms of what kind of tariffs will be cut with a -- if they end up complying with what the u.s. wants. dollar-yen moving higher,

equities moving higher, 10-year gilts moving higher as well. we will break down those headlines -- 10-year yields moving higher as well. you can browse all the features we are showing in the charts throughout the hour on gtv . this is bloomberg. ♪

alix: still following breaking from moments ago. thea sees the u.s. delaying december 15 tariffs as they want up discussing tariff cuts. two pronged. to see december 15 tariffs coming on your that looked -- coming on. that looks to be delayed. markets around the highs this session. theare buying everything,

dollar, bonds, u.s. equities. time for bottom line where we look at companies worth watching. we are joined by sarah ponczek of bloomberg news and brooke sutherland of bloomberg opinion. first we are taking a look at ted baker getting destroyed today. sarah: absolutely shares of the u.k. fashion chain getting pummeled overnight. this is after top executives at the company said they were going to resign. that includes chairman david bernstein and the interim ceo. at the same time the company did suspend its dividends. now what happens is the recently appointed cfo rachel osborne will become the acting ceo effective immediately. this all comes about when ted is dealing with a lot. allegations of inappropriate office behavior from its founder. at the same time they are dealing with allegations they have been overstating the amount

of unused goods. to date the follow-up bring shares down 80%. analysts at cmc markets said it best "ted baker is rudderless at a time the business badly needs a steady hand." alix: we are also looking at synovial. brooke sutherland takes a look there. brooke: already the signs are good, the stock is up for its biggest gain in more than six ofiths as investors think son will be suspending research in diabetes and heart disease. paul hudson wants to dive further into cancer. sanofi agreed to buy a cancer drug maker, paying about $2.5 billion, a serious premium for that company's closing price. whether this plan actually works

remains to be seen. my bloomberg opinion collate rights it is all down to execution and our pitfalls aplenty. this pivot took cancer drugs is -- somethingff of many pharmaceutical companies have attempted follow through on with varying degrees of success. alix: brooke sutherland of bloomberg opinion, thank you very much. coming up, more on the breaking trade headlines they are looking at delaying the u.s. tariff increase on the december 15. if you're heading out and jumping in your car, tune into bloomberg radio heard across the u.s. on series -- on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: more on the breaking news that u.s. and china negotiator will delay the tariffs. for more, peggy collins joins us

from washington. what we know so far, what is the significance? peggy: what our reporting is showing his it is looking like there'll be a delay in the tariffs that are expected on sunday or scheduled for sunday, december 15. these will be the tariffs that swooped in a number of consumer goods before the holidays. a lot at stake. what we are hearing from both sides of the ocean is it is looking more and more like there'll be a delay in those tariffs so they would not take effect on sunday, but they are still negotiating over several technicalities within the deal so we might not see a deal on paper by then. if you are wind to october, we were expecting to have a deal on november 15 or so on paper. alix: great distinction. you push back the tariff does not mean you have a deal. peggy collins, i appreciate that. in the markets, that distinction not as clear. i want to get into the technical

spirit bill maloney, voice of bloomberg equity squad joins me now. you can listen to bill on the terminal at squa . we had this bounce and move on the optimism, but what are you looking at. bill: they are up about five points. we want to look at yesterday's action to give us a guide. right now we're at 3140. we want to look at this congestion area yesterday that brings you to 3145. your second resistance will be 3150. we get above that and you're looking at the highs around 3157. your first area is 3145 or resistance. alix: is this just algorithms -- bill: we saw the spike before the headlines came out. algorithm driven but look at 3145. alix: i want to highlight one

stock. that is called brothers reported after the bell. what are you looking at in terms of the stop that has been going nowhere? bill: it is down around 2% in the premarket on week q1 guidance. the trading range since the september spike, resistance will be around 42, which is the top of the range. a five-year chart, you are probably looking at this level, which is around 44. 42 and 44 are your numbers. on toll brothers. alix: bill maloney, i appreciated it. that does it for me, coming up on "the open," jill carey hall. this is bloomberg. ♪ here, it all starts with a simple...

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jonathan: coming up, reports the u.s. and china will avoid the tariff hike. the two day fomc meeting begins, chair powell looking to engineer a soft landing, and the british people heading to the polls as the economy stagnates. good morning. here is your tuesday morning price action. futures advance well off the lows, up .1% on the s&p 500. 1.1078 and up to your yield on the 10 year, 1.82. a busy morning ahead. moments away from a news conference with the house democrats where they're expected to unveil at least 22 articles of impeachment against donald trump. when that begins we be bring it -- when that begins we will bring it to you. chinese officials expecting the u.s. will delight a threat of tariff increase. for the latest we are joined by josh wingrove, bloomberg white house reporter.