improving we have seen this bottom in global datah taking called, the from china overnight showing things are definitely starting to be low expectations. the kai-chen manufacturing index in china has been moving in the right direction performance in a row. it is not just the trait improvement but there is a feeling growth x dictation scott to negative. -- that growth expectations got to negative. the only question is how much of that is baked in the cake. scarlet: we have gotten the latest data here on foreign u.s. security purchases. japan has widened its cap over china is the largest u.s. treasury holder. rising 22.2 plug-in dollars in the month of october. a bit of a lagging indicator. china's holdings of treasuries

meantime falling to $1.1 trillion. so, japan widening its cap over china as the largest u.s. treasuries holder. it looks like the dow, acid p, closing at record highs. this is not like a but ie surge higher, guess if you want to call it the melt up or whatever. we can talk a little bit about some of the hedging but i think our market reporters are standing by eagerly awaiting the chance to break it down. let's check in with those reporters. you wereearlier today, talking about that skew index. an important factor to keep in mind for sure. today, it is rising surprise. it is the quote unquote panic index.

everybody knows the vix index. index is skew considered to be maybe a little more fine tuned. this chart going back to last summer, the vix and the twelves. the skew index, off the charts. those investors, whether they were hedging or outright short, they were right. in the fourth quarter, the vix shot higher. we are starting to see a pretty interesting divergence. skew going the highest since september of 2018. it probably suggests some investors are hedging. but based on the relationship of what happened last year, definitely worth keeping an eye on this. a small etf with the ticker symbol ipay, the prime mobile

payments etf. it has been on a pretty good run. you're today's come up about 42%, beating a pretty strong market this year. inflow intoone day this etf on friday. $86 million added to the fund. it represents about 12% of the assets of the fund. if you look at some of the stocks, there are some high flyers this year. up, fiserv and mastercard up. these up. -- visa up. is cost to borrow score three. to put that in perspective, the cost to borrow score for bigger, more liquid fund's is usually about one. it is hard to say if it is t

bullhe bears on this fund that has really helped it see the massive inflow on friday. renita: i am taking a look at palladium, which has gone to a record high. can look at what happened during the inter-day. it is also up on the continued strong demand and a worsening supply shortfall. 56% so far this year, currently the most expensive precious metal out there. is onts say the price track to soon hit $2000 per ounce. romaine: you probably heard scarlet chattering in the background but we will pick up the conversation with scarlet and of course, the ftse research managing director. there was a note out earlier

from bny mellon, where they talked about market participants being agnostic, the idea that people are kind of happy with where things are. is that necessarily a good thing with regards to providing support? you can look at it as a good thing because you will not get that extreme sense of euphoria that will create bubbles and push the markets past where it should be. one investor this morning said we are experiencing both the fear of missing out but also the fear of loss. we are at this point where we had an unbelievable year. we are really within spitting distance of one of the best years the market has ever seen in the past couple of decades or so. you might imagine that you can't have great gains going forward

but if you really believe in the case for a rebounded growth, potentially a rebound from the anemic profit growth we saw this year, then you can make the case bondsuities to outperform and other asset classes. it is true that even if you look at the bull market over the past decade, you have the longest bull market on record in part because people have been skeptical. if you have someone who is not binary, sitting in the middle, that can be taken as a bullish signal. scarlet: if you missed out on the s&p 500's 20% rally this year and you believe that things are going to get there. it is the case that the clouds have parted a little bit here. in do you time to get wait for a better entry point? >> you can target areas of the market as a way to end of get into the market without

targeting the broader market. we are seeing better data globally. financials started to outperform. that is definitely helping value lead this month. small-cap is starting to work. beta of these more high procyclical trades have credibility now that we are seeing a turn. when growth companies were the only companies with reliable, organic growth. ,ow that there is more economic investors are willing to go beyond technology in their pursuit of cyclicality. at 12 month core performance, after we see a bottom in the new orders component, manufacturing, over the following year, if you look at a russell 3000 universe, cyclicals not performed the overall market by 5% and

defenses by 1%. involved ways to get in the market without buying the most extended areas. romaine: what about em? that was kind of a call earlier in the year, did really pan out. >> i think the dollar has been big. the interest rate differentials with the dollar relative to the euro, the dollar has cooled off enough that it takes a big headwind away from emerging. relative toformance developed markets is highly correlated to the dollar index. when the dollar index is going up, it is really hard for emerging to underperform. not that it is stalled out, i think it is a green light more relative to the u.s. scarlet: there was a story you helped co-author about how we

moving these three year cycles increasingly. it is part of a three-year story where things go up and come back down again. there are a couple of research notes talk about these three year cycles. the case has been made that we saw a downturn. flat profit growth. could same time, but we -- what that could potentially mean is that we are in that recovery part of the cycle right now. that would bode well for the cyclical shares. alec, thankah and you very much. that does it for the closing bell. "what'd you miss?" is coming up next where we will be talking about trade. this is bloomberg. ♪

romaine: live from bloomberg's world headquarters in new york, i am romaine bostick. scarlet: i am scarlet fu. joe weisenthal is off for the day. romaine: energy, utilities, and tech pushing stocks to an all-time high. trade momentum. wall street its record highs on the opus that a phase i deal will ease risks. ofper could beat the trade 2020. -- could be the peak trade of 2020. boeing makes a decision on whether to halt production of

the still grounded 737 max. president trump this afternoon telling reporters that the much-anticipated phase i trade deal will be finalized in the next few weeks. on how us now for more the trading developments will impact the global economy, citi global economist cesar rojas. the phase deal has been agreed to in principle. is it prompting you to change, revise, update your forecast in any way? >> we are not there yet. we have seen is in line with expectations. the parts of rollback of september tariffs. we have not seen a level where uncertain could be fading. we are still expecting growth around 2% in the u.s..

we are expecting growth locally to remain around 2.7%. the reason to update. romaine: are you able to quantify how much ddp was affected for the trade deal to this point and how much will be recouped? cesar: so far, what we have seen, all of these have been cutting chinese growth by about a percentage point, which aboutts into u.s. growth 2/10. globally, perhaps, another 2/10. the main issue is that the reason for this trade deal, the ,otential rollback of tariffs that basically will add around 1/10 on u.s. gdp growth. update no reason for an

in our projections. scarlet: what we have seen out of china is that the economy seems to be on the mend. you have retail sales, industrial production better than anticipated. fixed asset did not outperform but came in around 5.8%. does that show that the chinese economy has already seen the worst of the effects from the tariffs? cesar: the way the we see it is that the signing of the phase i deal will give more time for china to stabilize its economy. trendwill be a downward in the chinese economy as it starts to transfer from investment-related to consumption based. movement fromward a long-term perspective. to that extent, we are just buying some time, kicking the

can down the road for now. romaine: do you think we put too much emphasis or focus on trade with regard to the effect for economic growth? what other factors were out there contributing this year? we saw different factors for instance in europe. the auto sector in germany. , the trade war between the u.s. and china hitting europe. we are going to see the trade tensions continue to give some impact to the global economy. scarlet: we have not talked about the usmca. robert lighthizer had a banner week last week. it was not only the u.s.-china trade deal, but also the usmca.

cesar: easing the uncertain deed that has been weighing on the region, uncertainty in the auto sector. so far, even though the report , the impact of uncertainty will help. however, the main issue will be whether there is uncertainty on the implementation. romaine: a lot of people are sort of banking on this idea that we start to see an increase in business spending, capex spending. given how long -- i was going to see -- going to say how late, but how long, will you expect a meaningful uptick in that type of business spending? the consensus

growth because of that. not only from the transportation sector there, but also perhaps in residential investment. that we have the adjustment of inventories, yes, the trade war headline has been bad, but you are still seeing demand down the road. that will lead to investment for just that amount. romaine: our thanks to cesar rojas, citi global economist. coming up, going above and beyond meat. we will hear from the ceo on the company's banner year and what to expect in 2020. this is bloomberg. ♪

has beenbeyond meat one of the hottest companies this year with shares up 200% since the ipo in a. we spoke exclusively with the ceo ethan brown about the key to the company's success. >> you always want to align yourself with the market players. when we decided to go into retail in 2009, the first company we called out was whole foods. when you look at our venture history. wasfirst we worked with kleiner perkins, now we have a huge list. if you are now looking at the fast food space or quick food restaurant space, you want to adopt the same philosophy. who are the marquee players and

i do you become of service to them? that is what we have been able to do whether it is mcdonald's, subway, carl's jr., constantly looking to serve the biggest partners in the space so we can grow with them. consumer, be retailers, or a 50-50 split? >> our relationship will be with the consumer. they told us no gmo's, keep everything natural. that is what we do. it would be much harder to genetically modify plant material to take on the texture, appearance, and aroma of animal protein, but we won't do that. we will meet the consumer where we are. if it is quick serve restaurants, we will be there for them. right now, it is about 50-50.

>> from a volume perspective but , what brand perspective if you take it away from that test? ethan: i had the great privilege of being up in the ontario area a couple of weeks ago, i drove out to mcdonald's and went to three different stores and had the burger in each location, and they were identical and delicious. had for aoal i have very long time to be of service to me at mcdonald's. . think you heard the ceo i am very enthusiastic about my relationship and the ability to grow the partnership. what you want is a great test. >> china accounts for about 7% of the world's meat production

by volume. they already look at -- they are ready eat a lot of plant proteins and look at it as a bit of a status symbol. bean: you will see us aggressive there. in everygressive market we are in. you will see us move with speed and exploit the first mover advantage. i can't disclose anything particular. we are very excited about that market and active in our plans. >> let's talk about chicken, if we can. big chicken fancier as well. the kfc test, as it were, down went gangbusters. how soon can you sort of get into that market in a meaningful way.

i can't name a specific partners or developments but we look at three core platforms. beef, pork, and poultry. you are starting to see some pressure around the poultry industry. we have done a lot of work there. he will see the fruits of that in 2020. >> i do wonder what you have learned along this important year as a ceo and investor. to work at an office where you doing something important not only to me personally but to the world is terrific. that this is ae short-lived trend. this is something that has very long legs to it.

we are not suggesting that people don't eat meat. we think that would be a big mistake. i grew up eating meat i love meat. i love fried chicken, burgers. the idea behind the company is to provide a better form of meat , to provide all the delicious, satiating experience, but does so in a way that is healthier for your bodies and healthier for the earth. if you look at what the mobile phone did in relation to the landline, nobody had to denigrate the landline. we simply have to provide the consumer with a new and better choice, and let them make the decision. romaine: that was beyond meat ceo ethan brown, part of bloomberg's businessweek 50 list this year. to say that real meat producers are struggling. when we take a look at what

beyond meat has done, they are up about 200% on the year. we have companies that have more than doubled their share price, up about 160%. inn tyson foods based here the u.s., up about 60%. scarlet: there is a lot of demand for real beef, real pork, especially when you look at the overseas market. we were talking about this earlier, it is actually red meat. romaine: today life? -- did they life? -- they lie? scarlet: they might have stretched the truth. romaine: i thought it was healthy. scarlet: because it was not red meat? a california judge ruled they will not allow uber drivers to be recast -- to be recast of

lead as implied -- reclassified as employees. this is bloomberg. ♪ here, it all starts with a simple...

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mark: i am mark crumpton with news.erg up word senate democrats are pushing for testimony from trump officials in an impeachment trial. he is facing two charges but democrats. house members will vote wednesday. only the fourth u.s. president to be charged in impeachment proceedings, president trump has insisted he has done nothing wrong. michigan congresswoman slotkin says today that she will vote to impeach the president. she first announced her decision in an op-ed in the detroit free

press. then, she explained her thinking in an intensive town hall in suburban detroit. ande who support trump anti-impeachment protesters were in attendance. >> i worked on the national security council under george bush and barack obama. presidents regularly wield their power to influence other countries. that is a normal part of what a president does. what was fundamentally different for me was that the president decided to do this for his own political gain and not for the national security interests of the united states. mark: slotkin represents michigan's eighth district, which backed trump over clinton in the 2016 election but elected her in 2018 over a republican

incumbent. canadian prime minister justin trudeau is beginning his second term with his country's finances in much worse shape than expected. new budget estimates released today by the government show canada is apparently currently on track to run a deficit of about $20 billion this year. 2019 and 2023en are expected to exceed predictions -- exceed projections by 26 billion. turkey is set to close two missile -- military installations. president erdogan told turkish dtv that he is pushing ahead for a deal with the russian s-400 batteries. nato members say the purchase is incompatible with membership in the bloc.

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. i am mark crumpton. this is bloomberg. between gold swinging gains and losses today as investors continue to assess the phase one trade deal between the u.s. and china. intecting more gains ahead 2020. joining us now, the analyst behind the bullish call. gold has had an interesting run. kind of stalled out for a while, found its mojo. i understand why you would be bullish a month ago, month and a half ago, but with the fed standing where it is now, some of the clouds clearing, why is gold still bullish? >> i think it has held up very well given that we have had risk appetite returning. toward the end of the year,

scaling back in gold anyway is typical of the past five years. at the moment, we say the risk to buy gold -- not so much. there is still position that is likely to take place. we expect the fed to cut in 2021. scarlet: because of a slowdown in the economy? suki: this year, we have seen people turn to gold not just because of the event but because of geopolitical concerns. we think that we have seen a number of these risks materialize again. that mean fordoes silver, which is both a precious

metal and industrial metal? if people see that economies have a little more certainty in front of them, doesn't that bode better for a metal like silver over gold? suki: typically, we see silver does well when it comes to industrial demand. investors have been interested in silver. particular retail investors have been turning to silver. remainsacroenvironment supportive, yes, we will benefit. romaine: before we move on to some of the other metals, with regards to gold, there was a narrative this year that a lot of it was because central bank buying. china and russia, that was kind of the speculation. what is your take on that and do you think that will be a factor in 2020?

suki: i think the central bank buying has been important because it has provided a floor for prices. ease, centralg to bank buying has picked back up. this year, we think it will be almost as high as last year. the preliminary data shows buying around about 40% in october. next year, we think it will remain elevated, but perhaps not as high as this year. scarlet: what about platinum? we saw prices move up dramatically recently because of the power shortages in south africa. surely, that will be something concrete and discrete. what does that do for the outlook for platinum? suki: it has been a market that has been oversupplied.

it has swung into a deficit because of a huge inflow. the fundamentals are still a little bit weak. next year, we are likely to see the market moving closer to balance. supplies have provided the upward catalyst for prices. we think will be substitution or more supplies in disruptions that will supply a significant move higher to move prices up. romaine: a lot of this of course is tied to the auto industry, the market, the idea that some of the automakers need the metal. there was some concern in the market that the automakers would , thatn alternative metal they could basically do something similar. do you anticipate that? tremendous, been the strength we have seen given that 80% has been used by the auto market. even with slowing car sales, the

amount of palladium used has continued to grow. isstitution for platinum feasible but we have not seen that take place just yet. given the kinds of emission standards we have seen around the world, there is more of a need to increase palladium loading. we think substitution is likely to happen, but not anytime soon. scarlet: thank you so much, suki outlook forng us an precious metals. we are expecting details on boeing. boeing will hold mass production in january. of course falling right now in after hours trading after this report. production of the 737 max will be suspended. there had been debate about whether they would slow production or hit the pause button with some saying that hitting the pause button would be less disruptive in the end.

romaine: hundreds of suppliers rely on boeing come also down here in post-market trading. this is bloomberg. ♪

romaine: some breaking news on boeing with the 737 max. boeing will temporarily hold production in january. there was some debate here among the board members. they are currently meeting to decide whether to halt or reduce production. according to dow jones, they are going to halt production. george ferguson is a senior

analyst for european airlines. can you give us an idea of how significant this can be not only for boeing but for survivors -- but for suppliers as well? george: boeing, the second largest commercial aerospace manufacturer in the world. it will have a large impact on all their suppliers and the u.s. economy. imagine i would also that it means, what had been a coup for the white house, getting china to agree to miller -- to more industrial purchases. presumably, it would have included boeing airplanes. george: on that front, i would say the backlog for airplanes is pretty large.

for the most popular airplanes, max, 787, you have to wait five or six years to get your airplane. china can place orders now and still get an airplane within a couple of months of when they thought they would get it. china has not ordered the airplanes in a a while and that is a bit of a drag on boeing orders this year. reasons why of the boeing stock had not cratered was this idea that essentially it is part of this duopoly with airbus. is there any real tangible risk that we would see a significant number of airlines push orders from boeing 737 max to whatever the equivalent airbus plane is? george: the six-year backlog for the 737 max is even larger 50

airbus. i don't think that means you would have to wait seven years but i think it means you would have to wait four years. i think that effectively means that it is really, really hard to switch. there is not enough capacity to make commercial airliners in the other.or one or the scarlet: that is a couple of years down the road. in the near-term, we know that they are compensating customers for the grounding of the 737 max. face any kind of cash crunch another we will not see it return to the skies anytime soon? i think the delay does ultimately increase the payments they will have to make to their customers. in the near-term, positive 730's -- pausing 737 production will

save them about a billion dollars a month. $1.5are spending about billion of their money per month , probably having difficulties finding places to park them now. i think you could do that when you saw your way clear, but i think they are a little unsure about when the faa will be finished reviewing the airplane. parking costs are pretty high. thank you so much. let's switch gears. for decades, the asset management industry, pricing power which led to fat salaries. asian spoke with us earlier. >> we have never seen such disparity between winners and losers. for most of my career, a rising

tide floats all boats. unless you did something truly bad in terms of investment performance, you did fine. that year is over. the combination of pressure, much higher focus on performance, and this consolidation of managers by the large pension funds, we are seeing just a few business models winning and most losing. we see the larger boutique managers, largely alternatives doing well. some ofequity firms, the private credit firms. there are a few that are global in nature that have strong performance across both active, and public and private asset classes, that are doing very well. the vast majority of firms, if you are just doing public equities, just doing fixed income, you are struggling. we don't see that changing

anytime soon. in terms of number of firms, it is probably about 80% to struggling. in terms of assets, the winners heavy portion of them. 80% going away? >> that is the great debate. truly say, if this was a industrial industry, wouldn't you expect consolidation and capacity to come out? ais logic has been true for number of years but it never really happens. the asset management industry is a profession and not a business. it is driven by a fiduciary duty to clients. clients do not necessarily want these messes to be consolidated. they certainly think that most m&a creates a lot of cultural issues, which actually hurts

their returns. they are generally not in favor of this. >> it does seem like the 80% is kind of going away. >> going away but how? our view is that they will become zombie firms, that they will continue to exist, their margins are not as good as they were, but they still pay the bills, but they never really go out of existence. therefore, capacity does not go out of the industry, which is why you see some fee pressure? -- fee pressure. the fee pressure is sometimes characterized as a broad industry trend. there is no question that equities have seen a lot of pressure on fees. part of it has been people looking for the best deals, whether it is the right share class or etf's that are quicker.

if you look more broadly at asset management and you say, do we see it in private equity, real estate, private credit, the answer is no. we certainly see fee pressure but, over the last five years, our average fee yields have been consistent because we have been growing higher-yielding strategies at the same time that we have had fee pressure on the retail side. but it isainly true not a dominant theme. scarlet: from new york, this is bloomberg. ♪

recap theust to headlines on boeing. it will temporarily halt production of the 737 max jetline. this will happen in january. according to other media

outlets, boeing has no plans to furlough or lay off the workers on the 737 max production line. boeing has decided that it will suspend production as opposed to slowing it down. romaine: time for asia ahead. carrie lam getting a vote of confidence from beijing. continue tong would support her as she deals with months of unrest. sherry, let's start with the comments. they were pretty pointed. shery: he was saying that hong kong was facing the most complicated situation since the return to chinese rule. he continues to back carrie lam, but he kept urging the hong kong people to return to the right path, a's -- a sentiment that was echoed by carrie lam, that a return to the right path depends

on support from the government, but not necessarily the people of hong kong. we look at the economy, how it is doing overall, hong kong is such an interesting economy because it is so tied to the property market and the property market is doing not terribly. scarlet: it sometimes reminds me of what happens in korea as well because everything is tied to the property market. the recession and hong kong, this will probably continue in 2020, yet when it comes to these property prices, they are not budging. this is one of those key issues that hong kong people have that they cannot own property because it is so expensive. saw10 consecutive weeks, we property prices decline in just a bit. we are seeing this pent-up

demand, low interest rates, all supporting these property prices. thatne: we had a story out one of hong kong's wealthiest families are helping out. shery: they are seeing the impact when it comes to the hotel business. the structure of the hong kong economy, it really depends on these tycoons. the help of the government to keep the economy and their businesses afloat. scarlet: thank you so much. for more on these stories, don't miss daybreak australia and daybreak asia with shery ahn starting at 6:00 p.m. eastern time. coming up, don't miss this. fedex will report second quarter earnings after the bell. romaine: u.s. housing starts out at 8:30 a.m. eastern. scarlet: "bloomberg technology"

is next. romaine: this is bloomberg. ♪

♪ kurt wagner -- kurt: i'm kurt wagner in san francisco. this is "bloomberg technology." phase one of a trade deal. the next portion, phase two. john chambers on his top tech