putting to brexit divorce -- minister boris johnson putting the brexit divorce deal to a vote on friday. risk on voices saying to phase i trade deal could unlock more upside for equity markets. an boeing production grounded. shares of the plane maker dropping after announcing plans to stop production. "elcome to "bloomberg daybreak on this tuesday, december 17. i'm alix steel. you are seeing a little bit of a pause in the markets, unless you are in taiwan, because those markets hit the highest level since 1990. a teeny bit of buying in the bond market, a teeny bit of lightness in the s&p futures. time now for global exchange. we are going to bring you today's market moving news from all around the world, from new delhi to london, to brussels and

washington, our bloomberg voices are on the ground with today's top stories. newndia, protests against a citizenship law sparked unrest across the country, raising concerns that prime minister narendra modi has taken his agenda too far. joining me from new delhi's bloomberg's southeast asia government editor. these protests have been going on for about a week now. what do they want? what is the goal here? reporter: they want this new law overturned. this law bans undocumented migrants from neighboring citizenship,king while allowing migrants of other religions. ifi has pushed this wrapped policies in the past, like his decision to de-monetize 80% of the country's currency, and yet

he was reelected with a massive mandate in may. but the depth of this anger really hints that he is pushing his hard-line hindu agenda too hard this time. alix: now we had to london, where the threat of a new deal pound'sas wiped out the postelection gains. joining us is jess shankleman. what happened the last few hours? pound ist's right, the down sharply. the ftse is down as well. the reelected prime minister has revealed some more of his negotiating tactics with the eu, and he said a no deal brexit remains very much on the table at the end of the next negotiating period. interestingly, what it looks like he is going to do is change u.k. law to stop ministers from allowing an extension if they haven't agreed to a deal by the as if 2020, but it seems

international law will continue to allow an extension, so what could possibly happen is if an extension was needed, the law would maybe change again, and that would happen. but boris johnson sending a very clear signal here that he is negotiating hard to get a deal done in the next year. alix: thanks so much. brussels, where european union leaders have agreed on the landmark green finance regulation. the deal will advance the push to embed environmental goals and standards for banks, moneylenders and issuers. a stark difference from friday, when there was no agreement to be had. reporter: it sounds different, and i have to say, this is early steps, but it could be a significant step. european officials now agreeing to set up a regulation framework for sustainable investment. the goal here is to really define what is green and what is not when it comes to investment here in europe. the logic behind the decision is

if you are able to get regulation done quickly, you're going to be able to attract .oney and capital quickly you have to look into the politics here. the european commission is pushing to get this deal done quickly, so this is all part of the same agenda. the language at this point is vague. the details are also vague. i am being told it could take up to two years to get a clear list of what is sustainable investing in europe, but it is an agreement nonetheless. alix: thank you so much. now we turn to boeing's deepening crisis. the company said it will stop production of its grounded 737 max next month. southwest airlines announced it will not schedule any flights on the 737 until mid april, more than a month later until previously planned and about a year since the crisis began. joining me from berlin is benedikt kammel. walk us through what we know and what the hurdle now may be.

benedikt: boeing took what it said was the least disruptive option, which is a hard stop to its production of this line. since march,dle but they still built the plane, about 40 month. we have about 400 of these finished aircraft sitting on the tarmac. if you think about $120 million a plane, we are approaching about $50 billion in idle aircraft, and boeing just came to a point where they realized they have to decide one way or the other, and they've now come down on the side of a hard production stop. this will ripple through the entire industry, not just boeing. a lot of suppliers are affected by this. about 400,000 parts go into each of these, so the question for boeing is what do they do with the workers and what do they do with the parts? it is going to be a huge headache for the company going forward.

alix: thank you very much. finally, we end in washington, where the house is set to vote on the impeachment against president trump tomorrow. house intelligence chairman adam schiff and judiciary chairman jerry nadler are expected to be named to the trial manager's team. joining us is kevin cirilli, bloomberg's chief washington correspondent. atin: later this morning, 11:00 a.m. new york time, the house rules committee will convene in order to set the rules for tomorrow's likely impeachment vote in the house. among the issues they are going to be grappling with is whether or not there will be a voice vote or electronic vote. in other words, will lawmakers have to stand up and say how they are going to vote, or simple he be able to press a button? elsewhere, they are also going to be able to decide just how long the speeches will be on each side. the bottom line, the white house digging in. they are also fully anticipating some type of trial, though it is

unclear for how long that trial will last in the senate. either way, the house votes likely tomorrow, making president trump the third president to ever be impeached. alix: thank you very much. here's another story that caught my eye this morning. this is a report that amazon flexed its muscles over how products get to shoppers. the world's largest online retailers has third-party merchants can't use fedex ground for delivery during the holidays. amazon says fedex is just too slow. the two companies have been at odds for some time. they failed to renew a delivery contract. aszon goes through this there is a lot of pressure on it for an time and ugly practices. a curious time -- for practices.ly a curious time for this. this is bloomberg. ♪

alix: time for bloomberg's first take. with me from our in-house team of wall street veterans and experts, vincent cignarella, voice of the bloomberg audio sqawk. also joining us, rick bensignor, bensignor investment strategies president, and mark rossano, c6 capital holdings founder and ceo. i was joking this could get pretty nerdy pretty fast. [laughter] vincent: it could go either way. alix: i want to start with brexit unfortunately, because we still have to be trading around this, unfortunately. vincent: this is going to be a long story. we spoke yesterday. you asked me if i liked the pound, and i said no. alix: that was a good call. vincent: i think that is the story going forward. sterling and the u.k. have a lot of hills to climb.

we are nowhere near close to an end result on this. we have to navigate all of these individual treaties. if you look at how long usmca took, and that was based on a 30-year-old treaty, that has taken quite a long time to get there, so there's a long way to go for the u.k. not too happy about the prospects for the pound. i think good c $1.25 quite easily. that brings us back to where it is recently pushed up from. atad been long for clients $1.25. we punted a little too early. if you were right -- if you are right, i would probably come back into it because i think there are so many investors who were short for quite some time. they still need to come out of the market for this thing can really adjust. vincent: never a bad thing about taking a profit. [laughter] >> i think the big thing, you

come back to the different trade components and the different treaties, you are already seeing it show up in the economic data. the economic data is already struggling. you had people preparing ahead of four months ago, when guys were trying to build up inventories, and now all, all of those inventories you built are gone. you're starting to see that reflected in the service sector, retail sales, and there's going to be a big problem as they go forward, as they try to figure out what is trade going to look like, what are these tariffs going to look like. the election gave them a directive. how many times can you vote to get this thing to go away? it is just not happening. i will: the one thing say before we segue into trade about sterling is i do like it against the euro. i think that germany, which does lead the engine of europe, is caught between a rock and a hard place. they are going to be pushed by china on 5g and huawei. if they don't do that, they will

see tariffs on autos. if they do it, they will see tariffs from the united states. so if you want to own sterling, i like it against euro. same story going into the first quarter, i think markets totally correct. we've whittled away a lot of this inventory buildup that came into the fourth quarter. we've probably stolen some growth for the first quarter. pace,r week pick up the i'm not sure, but i think it will probably follow one better in the second quarter. rick: when you're talking about trade, i assume you're talking about china. vincent: yes. rick: the way i interpret this phase i deal is it is really kind of a beginning piece to something that is much bigger, and if you look at what phase i supposedly accomplished, it is a tiny fraction. it is a bear movement of what

things were before hand because the biggest trade issues are still not being addressed. until those ultimately get addressed, this cat and mouse game between the two countries. mark: people need to eat, and the things that are in this trade deal like soybeans, they were going to have to buy them or -- they were going to have to buy them anyway. what didd of the day, we really accomplish? we went back to october 11, but at the same time, we've just seen promises. they have to interpret it. they go back and forth. i still question if this one can get across. rick: and how do you enforce? if either of the countries doesn't do what they said they would do in phase one, what do you do next? you just have a stall point again. vincent: your point about a kata mouse game i thing is going to go on for a long time -- a cat and mouse game i think is going to go on for a long time. alix: so explain to me, you have

all of these big calls coming out. you have blackrock coming out jaef -- markrk , goldman sachs. how much risk should you be taking on in this market? rick: i think you take moderate risk. alix: i'm guessing that doesn't mean euro area banks? rick: it's interesting. two weeks ago, i wrote clients that euro financials are on the verge of a breakout. i want to watch them to see if we can get a technical breakout to the upside, in which case would go with the momentum and play. go big issue here is as you into 2020, with a market that is flying and in this multiple phase we were already in, how much more do we have?

this a lot of analysts saying 2020 will be very moderate about when weink entered any 19, with the numbers were. most of them were negative. i don't count much on the prognostications of many strategies on wall street because they tend to be anchored where the prices and make adjustments either way. numberserally keep the into those levels, and forget 25% arew often 20%, actual concerns. mark: i think the bigger problem we are looking at is liquidity. easing, what, 27 banks

16 of them in the major market? apparently it is a good thing, even though all of the economic data is struggling, but the markets are going up. so is it really a world that is a better place, or do people just have all this cash they have to do something with? if you look at the s&p 500 with liquidity ursus economic indicators, economic indicators are going the wrong way from where this market is actually heading. i like to argue that between lehman and bear, the market then went bankrupt. what happened? you can see it in the economic data. you can see the slowdown in growth. but when do people care? vincent: there is a divergence in those economic indicators. personal income is on my downtrend. real earnings is on a downtrend. retail sales on a downtrend.

at the same time, homebuilder indexes at a 20 year high and health care costs at a 20 year high, the two largest components of pce. so do we get the inflation the fed is looking for in 2020 at a time when consumer spending is slowing down? not a good picture. alix: with everything overbought uncertain indicators, are you selling into every rally? but then you're going to miss out. what do you do with that information? vincent: i don't know that you miss out selling into rallies. i think a lot of people in the last 10 years made money because they were lucky. you have to be in the market, and it only goes one way. we all know things don't go one way. if there is a selloff, if there is a downturn, there aren't enough experienced investors out there who know how to make a return in a down market, which you can do. there are opportunities to short, to buy puts, to do strategies that will make you money in a down market.

i just don't know if there are enough people who know how to do that. you've had people going into passive funds. the market goes up. it will continue to melt up. but now when things get more difficult and single stoxx matter, i think at this point, you have to get very smart and try to move around a bit and be a bit more flexible, and you have to adjust sizing. we were talking about the euro. love the euro to the downside, but i would belong the dollar on the other side. there's the long gold, which 27 and it willrint in, be a very good spot to be. corn, soy, wheat. there's a lot of good opportunities without having to go into equities or things that are very frothy like the tech sector. rick: there's another side here that people don't address on any consistent basis, and that is you got the economic

fundamentals, all of the things that push the market higher over time, but what most people don't talk about is the game of being a wall street portfolio manager and how much that has an influence on prices. so as the year goes on, in a year that most pms work underweight, the best part of the market coming into the year have underperformed by and large. most long only pms are not close to the return the s&p has. the final quarter is often a push of the benchmark chase. it can be far more powerful than any of the news that comes out, the fact that there is something called tongued have -- called cognitive, what is the word i need? alix: cognitive dissonance? rick: dissonance, there we go. [laughter] rick: you've got people in jobs

that are fighting to have their jobs by year end. if the s&p is up 25% and you are up 15%, you're in trouble. if you are at 22%, you are fine. but if you are up 15%, you're in trouble. so a lot of the buying is not to because of the trade deal, not just because economic numbers are good and the banks are moving up. it is because people are fighting for their lives to be invested in the market. they have to be. as a formerill say, trader, if you haven't made it by december my you -- by december, you ain't making it by year-end. you may see positions that will not last the test of time going into the first of the year if something should happen to turn that froth into a bit of a melt up. mark: and again, how do you get the beta? there's always a talk where if the russell has underperformed the s&p, you buy the russell

because the russell is going to get you that beta. it is going to close the gap. then you unwind into january, take a little bit of loss into january, but you have 11 months to make it up, and you have to get to that point. alix: see, aren't you glad you are not a trader anymore? vincent: somebody was asking me that last week, and i still miss it a bit. alix: really? you can relax in december now. vincent: you could always relax in december because you are going to get paid anyway. [laughter] alix: vincent cignarella, things a lot. rick bensignor of bensignor investment strategies and mark rossano of c6 capital will be sticking with me. reminder, you can go to gtv under terminal. browse the features, check it out. gtv . this is bloomberg. ♪

♪ alix: you're watching -- viviana: you're watching "bloomberg daybreak." plunging nmc health because of concerns about nmc's financial statements. bloomberg has reached out for comment. in california, uber beating back an aggressive attempt to force it to treat drivers as employees. a federal judge declining to order the ride-hailing service to instantly convert drivers from contractors. it is an early test of california law aimed at gig economy companies. european car sales heading for a flat year despite a boost last month. in november, sales rising 4.5%, the third straight monthly increase. still, for the year, sales are down 0.3%. automakers are spending huge

amounts to develop electric and self driving vehicles. that is your bloomberg business flash. alix: thanks so much. another company i am watching today is unilever. shares falling the most in two sales gains this year will be slightly below guidance. they are blaming india and west africa contributed to that. the consumption slowdown has really been weighing on the market. something to consider, they report earnings january 30, so why did they come out now and have the downgrade? rbc says it has got to be something more than market conditions. coming up, we are weeks away from the start of 2020. we've got some top calls, coming up. this is bloomberg. ♪

♪ alix: this is "bloomberg daybreak." i'm alix steel. not much moving in the markets, with the exception of what is happening in the u.k.. european equities off record highs we saw yesterday. the ftse down by 0.1 percent,

despite the fact that the cable rate is also lower by about 1%. we can see how we have erased all the gains since the election for the cable rate as the euro tries to eek out some kind of upside. it all feels like we've had some geopolitical events unfold and "end" for now. we are just about two weeks away , i literally can't believe it, from the start of a new decade. still with me to give me their top calls, mark rossano of c6 capital holdings and rick bensignor of bensignor investment strategies. they were just talking about selling out of cocoa positions. we will start with you, rick. rick: i like going into japan equities. i think the nikkei has just broken out from a two-year consolidation pattern. technical analysts would call it a diamond-shaped pattern. as you moved up, you made higher highs, then took out the lows

and made higher highs. they've been doing the flip side of that, and just a week or so ago, we broke out of the downtrend of that high. this would measure that the nikkei could get to probably 28,500, a 15% move. what people forget, unless you've been around as long as i have -- alix: people feel really old when i say the next decade. [laughter] ink: -- the nikkei topped 1990 at 13,000. -- at 30,000. it is at 24,000 now, so it has plenty of room to go. plenty of room to go in the jacket when he's -- in the japanese equity market. alix: how much of that is value, buybacks starting to catch hold versus on the technical basis? rick: i think it is a

combination of both. i think there's pent-up demand. japan is always been a defensive market. japan in there, it is a place that really has some upside. alix: how about you, mark? mark:mark: the one i have been following very closely is vietnam. the proximate into china, it has become very clear that you have to diversify and make sure your supply chain can weather any type of new issues that might arise. vietnam has a ton of low hanging fruit. they've been building a significant amount of structure on the port, wire lines to get power into the main cities, and you have a very intelligent workforce. they are hungry, and they really want to earn some of this work coming out of china. i think, on a logistical level, vietnam mix a lot of sense.

they have to import a lot of their refined products. japan is a big importer. prices are going to be in their favor. as you continue to have to import, you are going to have that power source. lng prices have been favorable. that will continue. those are things that i think will really help some of these and attract that investment. alix: i am just guessing, knowing from your commodity background, is this also in transportation? if you have more stuff getting made, you have to get it out, that kind of thing? mark: yes. productly do like tankers. scorpio has been one of my favorites in terms of just more stuff to move. you have refiners that can't handle it. you have things moving around, and that is going to continue. but china is also putting so much product into the market, it is going to be beneficial for places like japan, places like

vietnam that have to go out there and buy some of their gasoline and diesel, which is going to have an attractive price. alix: i have two reform commodity traders with me on set, so i have to ask more about commodities. we did get to your chart, rick, that showed the gold etf trends. you are going to be a little bearish. mark is going to be a little bullish. what do you see? rick: clearly, the uptrend line, the lower of the two line, is bullish. that is good in what should be a longer-term up move. my bigger concern, we exited gold back in august at 1490. we've been a couple hundred dollars lower, and got a lot of flak with people saying, how could you get out of gold? terrible not been a exit considering what has gone on since. my biggest concern is when you look at the commitment of traders report, it shows that

the speculative longs, both large funds and individuals, people who are too small in the market to be counted as long times ase holding five many contracts in the futures market as they are shorts. that is down from six and a half, which is good, but anything from three to four, it is very hard for me to think gold can make any material rally ton the market is so skewed be long, and on the other side of this trade are the natural hedgers, the processors come of the people in the gold industry who have much deeper pockets than speculators. until we see that ratio get down to 41 or even three to one -- four to one or even three to one, it is very hard for me to see a fundamental rally. you would need a shift to occur in order for gold to make a move higher. you would need the dollar to collapse. you need something to change.

with status quo, gold really can't rally. mark: for me, gold is a core position. you are always going to try to trade around it, but i am always going to maintain a holding unit just because there is significant demand out there for ways for countries, central banks to solidify their currency, adjust accounts receivable, and their current accounts. at this point, gold will have an underlying bid. it is going to get worse and worse as the fed continues to print, as the ecb comes out with something new to spark life back into the economy. i just think at this point that inflation gears will start to ramp up to what we talked about earlier, and gold is going to be that natural position. you can clearly see this is a great chart to really trade off of, so this is something where if i'm a buyer, if it rallies, selling into it. sizing has to change, and the

way you trade things has to adjust. i typically like to trade in force. just make sure you don't put all of your eggs in one basket. you want to have something to sell once you get to that rally, and reassess and take a position again lower. alix: i have to think you don't disagree with mark's core thesis on gold. rick: correct. i think longer-term gold has many fundamental reasons to go higher, but rates have moved up. there are reasons why, when you think about -- and in fact, bringing japan back into this, a year ago or so, japan broke out of the 20 year base and should have screamed to the upside. the nikkei moved a few thousand points up from about 21,000 to 24,000, and then got all the way back down to 21,000 again. i don't know if gold will do

this, but we could sell off another $50 or $100 in gold, bring us back down to the 1375 dollars level where we broke out from, wash out all of the spec longs, and then you turn around because the long-term fundament was our good. i still own gold personally, but for institutional clients where we put a large -- where we put on large positions, i am not saying they sold out of every ounce of gold, but the theory here is it is very hard to think gold can rally when you have that many people all writing long. who is going to push it up now? the specs are already in. alix: to round out this conversation, both of you guys have the glass half-empty for next year. you already gave your bullish call. where else do you go for protection? where is your barbell? how do you play slowing global growth in all of that? mark: for me it is the chemical and refining assets. we talked about china coming in and changing the way the refined

product landscape is going. i think that is really going to hit margins, and you've already started to see it. you've had economic run cuts start to roll out within europe. . south korea and china have said we are not going to be the ones to make those cuts. it is going to be you, because we have other means of making , partly from gasoline, not to get nerdy on you. [laughter] don't worry about that alix: -- alix: don't worry about that. [laughter] thosebut when you have ,argins going to five year lows margins in specific areas going to two year lows, when are the stock prices going to realize that? i think that is your barbell. that is going to be how you make money. i will turn it back over, but when you look at the dashboards in cars, 60% of that is plastic.

there's a lot of things where if the car market continues to slow down, that is a huge demand for plastic as well. rick: i think the way i look at it is you want to belong the market -- you want to be long in the market, but i tell my classes all the time, you've got to know now where your exit point is if the market comes off. you cannot wait for -- if the s&p came off in hundred points, you will not be able to deal with your emotions at the time to make an intelligent decision. you've got to have your numbers now so if the market comes off, if it breaks a certain level, i'm getting out, i'm reducing, i'm hedging, i'm doing something defensive. here,now, we have rules but the 3027 level is where right now i say, if we properly break that, and for listeners here, that is all bunch of rules , but if we properly break 3000

27, you are probably going another 100 points lower. that range to me, which is ready about 3027 which is to be5, you are going hedging your books. alix: really great conversation. mark rossano of c6 capital, rick bensignor of bensignor investment strategies, thanks a lot. viviana hurtado is here with first word news. ritika: british prime minister boris johnson -- viviana: british prime minister boris johnson is setting up the possibility of a new deal split from the european union at the end of next year. eu leaders warning in that timeframe, it is unlikely negotiators will be able to complete a deal that johnson wants. tomorrow, the u.s. house set for a historic vote on impeaching president donald trump.

democratscommitted are starting to commit, most saying they will impeach. one from michigan says she has been told the vote would be the end of her short political career. a democratic resident candidate elizabeth warren backing away from her medicare for all plan. she now emphasizes that the proposal would be optional for most of her first term as president. warren has fallen in the polls. there is question on whether her support for medicare for all hurts her electability. 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 the viento hurtado. this is bloomberg -- i'm viviana hurtado. this is bloomberg. alix: coming up, mark cuban sells one of these tech companies to the owner of the l.a. dodgers. check out tv . you can watch us online, interact with us directly.

if you miss anything, scroll through and check it out. this is bloomberg. ♪

viviana: you are watching "bloomberg daybreak." pg&eupt california utility bought itself more time. the company and wildfire victims decided they do not need governor gavin newsom to sign off on their $13.5 billion deal. pg&e'sek, newsom said reorganization plan doesn't comply with state law. this is the biggest exit from utility company bankruptcy in u.s. history.

embedsa marque agreement -- over to hong kong, where violent protests have led to about $5 billion being pulled from investment funds according to the bank of england. the boe calling it a significant outflow. it warns problem in hong kong could spread to other parts of the world. i'm viviana hurtado. that is your bloomberg business flash. alix: thank you so much. we turn to wall street beat. first up, goldman revving up some fundraising. the bank puts together a new team for its merchant banking group. then, but where the zombie firms. says they are unable to perform or scale. and then mark cuban sells synergy to the dallas mavericks -- two a comedy backed by the

l.a. dodgers' owners. joining us is bloomberg's cinelli -- bloomberg's cinelli vasek. let's -- bloomberg sonali basak. goldman.rt with sonali: the idea here is fundraising. ?ho's in charge they had open architecture where more than $200 billion was degen hated to private market -- was dedicated to private market investment. he has a live experience with pension funds, insurance companies, and he did that for other funds. alix: so what is the goal? what did they want to be? sonali: right now the merchant banking division rivals the size of kkr. they certainly want to be bigger here. we are in a record fundraising

environment. this is definitely a big private market play, and which they want to be allocating money for their investors. alix: let's get to those zombie firms. david hunt, pgim ceo, talk about that. here's what he had to say on bloomberg. david: my view is they will become, i've used the firm some be funds, with vacant -- the term zombie funds. they still pay the bills, but they don't really go out of existence, and therefore capacity doesn't come out of the industry. alix: i feel like we've heard that a lot, but there's still so much money out there sloshing around, it is hard to get the zombie firms to die. sonali: there's two different strategies. one with goldman, where it is private markets, potentially higher yields. those are raising record funds. what david hunt here is talking about is something more and more managers are turning to.

forget the passive equities. let's get the higher fee business, the harder to execute business. you're completely right, there are a lot of zombie firms just sitting around, trying to figure out what to do next. but there are a lot of optimistic stories on wall street. i spent the whole day yesterday with people still watching some hedge raise significant money at some high fees. it is not like the whole industry is dead. i think with the revival of volatility a little bit, people are looking to capture more share. alix: and less return maybe next year, meaning more active investment. let's get to mark cuban. he is a real sports person. sonali: he is. i wanted to take the wall street angle on this because people forget how big the empire is of the people who founded guggenheim. a lot of private equity firms have empires outside of their investment empires, and todd gurley is particularly relevant here. he said this in an interview

with erik schatzker earlier this year. his firm is on track to earn $5 million spanning sports, hollywood assets, dick clark productions. even outside of their investment empires, they are really benefiting from their sports and technology empires, too. alix: that's cool. sports, hollywood, and futuristic tech. sonali: i like following the money, but everyone likes following the outside a little bit. it is fun. alix: appreciate it. ,n today's women of wall street i'm looking at this crazy number, 250 years. it will take more than two and a half centuries for the economic gender gap to close, according to the world a comic forum. it's actually gotten -- the world economic forum. it's actually gotten worse in the last year. still, they did see some promising signs. >> as more women are going into

politics, we are starting to see a little more at the top of organizations, it is creating more positive momentum. that is why we are starting to see a bit of a narrowing of the gender gap today. but it is still going to take a lot of other changes if we are going to try to speed up parity instead of waiting a century. tox: the wef has committed -- if you are heading into your car, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time now for trader's take. 20 may, vincent cignarella, voice of the bloomberg audio squawk -- joining me, vincent cignarella, voice of the bloomberg audio sqawk. you're looking at rates. vincent: we are. things i, we saw two thought were very interesting.

20 year highs in medical insurance, health care costs. 20 year highs in the building index. two largest components of the pce, cpi. hard to see this not lift treasury yields. i think going into q1, we will see higher inflation, higher yields. i think we can see 2.2% in the tens. cignarella, you've been saying that. we will see in 2020. johcm up, lale topcuoglo, senior fund manager, joining mark cabana. there will be a serious repo conversation coming. this is bloomberg. ♪ ♪ what are you doing back there, junior?

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december 17. i'm alix steel. here's everything you need to know. let's take it from the top. china provides tariff waivers to buyers of u.s. farm goods, while some warned it is too early to celebrate a risk on wind. >> certainly a collective sigh of relief is understandable. i think people will rapidly see that the uncertainty has not gone away at all. alix: global equities pull away from record highs. pm johnson: and we must repay their trust now by working to change our country for the better. alix: the u.k. sprints toward brexit. boris johnson could put the divorce bill to a vote friday and set a transition period which can't be extended. maria: boris johnson has revealed more of his negotiating tactics with the eu, and set a new deal brexit remains very much on the table. alix: the eu's warning of another cliff edge situation. if leaderer:

mcconnell doesn't hold a full and fair trial, the american people will rightly ask, what are you, leader mcconnell, and what is president trump hiding? alix: the houseboats on -- the house votes tomorrow ontwo articles of impeachment. kevin: among the issues they are going to be grappling with is whether or not there will be a voice vote or electronic vote. in other words, will lawmakers have to stand up and say how they are going to vote, or simile be able to press a button? alix: president trump could push for a longer trial that would like joe biden and his son hunter. itsng pulling production of 737 max. avoiding layoffs for now. suppliers, though, taking the heat.

in the markets, do you want to party like it's 1990? taiwan stocks hitting a record high today that they haven't seen since 1990, but then, you have richard breslow writing for bloomberg, "whatever happens in december stays in december." can you trust any of the moves since the election? -- joiningthe hammer me for the hour, lale topcuoglo, johcm senior funds manager. she invited mark cabana, bank of america merrill lynch head of u.s. rates strategy. they are both really keen to talk about repo. the fed has it under control. they said they have it under control. the repo rate has not spiked into the end of the year. why is this such a big deal for me? lale: well, i will let mark chime in and a second, but from my perspective, it is a vague part of the market where people just assume it works. i think the fact that the fed is

pumping in four hundred billion dollars or $500 billion just to make it past december -- part of it is also, have you ever played --ame -- god, i don't alix: twister? lale: yes, thank you. [laughter] lale: it could be a lot of things. eventually, you just get so bent out of shape that it comes crumbling down. my issue is we may have december in control. the question is there's january, april, february, there's which is the japanese year-end. hopefully mark can shed some light here and tone down my bearishness. has beenbe fair, lale warning of this for a long time, and did it happen. mark: there's a saying at the

front end that funding markets don't matter until they matter, and then nothing else matters. is like the 15 minutes of fame we've had the last couple of months for people at the front end. it was so critical to liquidity in broad financial markets. if there's a problem there, that means leverage doesn't flow. borrowing and lending, overnight collateralized, the safest lending you can presumably do, it means that credit creation ceases. that financials markets would have to deleverage because they lost one of the core sources of financing. that's why it matters so much, and that is why the fed was so spooked by what happened in september. they didn't envision it. they ignored markets -- they ignored signals the market was sending. they threw the kitchen's think at this issue to make sure we don't see it again in december. by and large, i think they are going to be successful.

you're going to see repo spike on december 31. i don't know by how much, but probably somewhere on the order of 200 to 300 basis points, but it should be only one day. at this point in time, the end of this year, you could have seen repo become unhinged again, and then it persisted for a week or two into year end. you could have seen broad-based deleveraging. that seems unlikely at this stage. i think the fed is probably quite relieved by that. you had a little bit of a litmus test yesterday. the same conditions that came in last -- the same conditions that cannibalized the repo spike in september. all of that i think is going to be quite confidence inspiring for the fed as they approach year-end. there are more medium-term issues. i think these are some of the things we were talking about in the greenroom earlier that are a bit disconcerting about what september revealed about the repo market and what the fed is trying to do right now to ensure

that doesn't happen again. thinki think --lale: i the issue is, when you talk about deleveraging, i think some of the participants don't understand because one of the arguments we see compared to the global financial crisis, people say there's not that many total return stop lines anymore. the market is not as levered. we always take about deleveraging. what is that deleveraging? what does that mean? which markets does it affect? i think that's the other piece, this vague concept that people don't understand. who: so what i think about is actually providing cash into the repo market and borrowing in the repo market, the way i simple fiat in my own mind is it is largely money market mutual funds, so bank like deposits that most of us have some cash invested in, where they invest on an overnight or relatively short-term basis in high quality assets, they lend to a dealer

that passes that along to a hedge fund. the hedge funds are the real end users of this leverage, or the borrowing. they tend not to have much deposit. they tend to have fairly light amounts of capital they are using, so they need to borrow to generate significant returns in a lot of investments they make. what they do is they are quite powerful at keeping markets in a relatively stable order. a lot of relative value hedge tods, so i am going to try take a view on the spread between the two. they tend to keep markets relatively orderly and stable. if they are not active, that means they are not buying as many assets. that means those assets need to find other buyers. that likely cheapens, and that can have broad spillover effects into other financial markets. think about the treasury hedge funds taking positions that goes out of business. that means 30 to be buyers for additional treasuries.

that puts upward pressure on overall treasury rates and base borrowing costs. that could spillover if we are in a broad deleveraging kind of environment. that means mortgage rates come under pressure. same --ey are at summit some insane number. mark: exactly. that has a direct impact on the real economy and the credit space. you could potential eca spillover and knock on effect if there were to be a broad-based and sustained disruption in the repo market. that is what i think was so scary about september. for many folks, it was unexpected. it brought attention to a small sliver of the financial space that you had just assumed worked literally well. it spooked the fed into some pretty sick conduction. i think there's a chart where we can show the -- some pretty significant action. i think there's a chart where we can show the fed balance sheet, and it shows that the overall size of the balance sheet, these are the repose the fed is there's noale:

problem. not at all. mark: it seems like the fed is taking actions they haven't taken since the financial crisis. they are treating repo like a crisis, and it is a fundamentally different state of the world we are in since the crisis times. but this is just a fed that underestimated the amount of cash that needed to be provided into the banking system, largely due to regulations. that is what drives a lot of bank demand for this cash. when they got that wrong, you saw the repo market explode higher, and they had to dig pretty dramatic action to try and stabilize things. have done that, but again, the balance sheet and the amount of repo they are providing look a lot like a crisis. that is not particularly confidence inspiring for a investors. alix: i get thatalix: worst-case scenario, but as a market for this event, argue allocated because of that? i getu changing -- alix: that worst-case scenario, but as a market participant, argue allocated because of that? are you changing positions?

lale: we actually have gone a little bit more bearish on credit, given where the spreads are since the end of september. we've increased our cash allocation. as we were talking earlier, the beautiful thing about low spreads -- or tight spreads is the incremental spread you give up by not buying a tight bb or b bb bond. you're not giving up much, so that optionality in my opinion is worth a whole lot. but what i think people continue to misunderstand is the whole plumbing and how that cascades through the system into different risk assets -- and i think this is part of the challenge we have as an industry because we run in silos, right? there the rates desk, the credit desk, investment grade and funding desk. nobody really talks and connects the dots, but when you think of the money flowing, it touches multiple spots. take the simple as to example

that people say in high-grade, asia has been a big buyer of on taiwaneseally insurers. usually what happens is you call your high-grade salesperson and say, the spreads look really tight. what's going on? where does that bond go? they are buying the different currencies. so they have to make a decision, are you swapping that currency or not? you are also running fx risk. alix:alix: there's a currency knock off effect if something is really disrupted. lale: absolutely. dated -- the long dated liabilities you move can be affected, and the currency can move on the other side. and currency are based on three-month swaps, so it is classic maturity maturation that banks are in for, which is now ,een imported to the insurers

broadly chasing u.s. dollar denominated assets that yield higher. if you follow the money, it is insane sums that are trafficking, and it all hinges upon funding markets functioning properly. mark: i think what we've realized in this episode is a few things, and i think many the fed still has yet to address. i think that probably feeds into lale's slightly bearish asset allocation right now. [laughter] mark: i think that it speaks to the fact that we realize that the repo market can be incredible he fragile, and this is the market that is going to supposedly replace libor in the future as the new benchmark interest rate. it is fragile because some key market for dispense such as the large banks, and how they make decisions, can cause massive spikes in the repo market. think we have also seen that there was, from the fed perspective, just not a deep enough understanding for all of

that theatory impacts changes and the rules they put in post financial crisis have on the banking system. that is not particularly confidence inspiring, and it is causing the fed to take relatively dramatic actions right now. third, i would say the last thing that is somewhat unsettling about this dynamic is that it seems like the market is just grappling with this glut of treasury supply that keeps coming down the pike. repose are collateralized securities. the u.s. treasury repo market is what spiked. that is the market that is required to buy and finance treasury securities on an overnight basis. when we reached mid-september, we find that there's too much treasury collateral for the amount of cash that was available to finance it, so the fed had to step in and eventually take the treasury supply off the street. this deficit issue is not going away anytime soon. so it is either going to be the

fed needs to have a very outsized role on the repo market for the full seeable future, or they are going to have to re-regulate the banks into buying and holding more treasury securities. i personally think you're going to see a little bit of both. the first order effect is the fed is stepping in and buying a tremendously large amount of bills. we think they will buy over $500 billion worth by the time we get to june of next year. that is roughly half of the , and annual u.s. deficit this is not qe, according to chair powell. but it is a massive footprint that the fed has in the treasury market. the question is, should they remain in that position? when you look at the total assets the fed has on their balance sheet, it has reversed almost half of the quantitative tightening they put in place just in the last three months. alix: and when you get there, how do you ever pare that at the end of the day? we got to leave that

conversation there, but we will be back. mark cabana of bank of america merrill lynch and lale topcuoglo of johcm are sticking with me. -- saying that we are at or past full employment. he does say you can run a tighter labor market without increasing some pricing pressures. he sees growth for next year just around 2%, and the unemployment rate at 3.5%. stay with bloomberg television later today. kathleen hays will sit down for an interview with dallas fed president robert kaplan. don't miss that. this is bloomberg. ♪

alix: we are just two weeks away from the start of a new decade, which is crazy.

if you look at flows into long dated bonds, clearly 2019 was a banner year. what will we actually see next year? still with me, lale topcuoglo of johcm and mark cabana of bank of america merrill lynch. this is my creative way of asking your favorite call for 2020, but the repo conversation is also not over. how would you respond to this chart, repping in your somewhat bearish feed? lale: we are adding a little bit more to cash holdings on the margin, managing our credit exposure, higher in quality. and on the equity side, we continue to favor asia and europe. and on the margin, trying to find cyclicals that perhaps haven't rallied 30% plus. alix: do you feel like the market has readjusted to a world where you're not going to get banana returns? mark: i'm not quite sure about that yet. it seems like most of the market

are still quite optimistic, at least in the first half, that you will see a risk asset boost, that you will see some positive spillover sentiment from reduction of uncertainty surrounding u.s.-china trade, more clarity on the brexit front. i think expectations are that you are going to see continued strong returns in risk assets, at least for the near term. for the rates market, i would think we see a bit of a slowdown just because we are certainly not expected that we are going to see the type of rate rally we saw this year. rates we think will remain low. the risks in the near will probably rise a bit as you see continued positive sentiment stemming from uncertainties. tomay feel uncomfortable invest in the near term but the economy, we think, globally is not all that strong. there's real headwinds, even with a reduction of some of these uncertainties. you could go from trade uncertainty to political uncertainty. you are really not going to see a big tailwind for the economy

coming from any additional fiscal stimulus, and you still have structural issues in the economy. demographics, low productivity, things of that nature. we are just not accepting rates to bounce higher in the near-term. that would be that pain trade for next year. if you're looking at potential he large outflows, that would be a bit painful. alix: which is also your worry for the money market. lale: i am going to cheat and look at my notes again. this is from my old firm. [laughter] sold for 2019, investors 212 billion dollars of global equities to buy $603 billion in bonds and money markets. so money market flows have been phenomenal this year. money markets are a critical player in the repo market. is an outflow, if

risk on is true, what does that mean for the -- alix: meaning that money comes out of the money markets, meaning you lose a buyer? alix: correct. mark: if you do see broad movement into equities or credit , you would think that the money markets could potentially bear the brunt of that. there was almost $600 billion in flows into money market mutual funds this year, a tremendous amount. a lot of that has to do with the flattening of the yield curve and subsequent inversion. investors worried about a recession, seeking stability at the front end of the curve. if you were to see the curve re-steepen, let's say -- and we find there is a good correlation between annual money fund growth and the twos-tens curve -- you are going to see outflows. if not outflows, you are going to see at least the pace of inflows into money market funds slow materially. what does that mean for the repo

market? it was noted, money market mutual funds are huge investors in the repo market, and in short-term treasury space. backstopre not able to the additional supply which is coming into the market due to these outflows and risk on sentiment, then who will? you are left with one of two big buyers, i believe. it is either going to be the fed or the banks which they reregulate into that space. it just means that these big repos the fed has been doing, the bill purchases, they need to last for longer. i think that is the risk. alix: i am taking notes as we go. we got to take a quick break. when womenwondering will have the same opportunities as men? 250 years. cool. we will discuss next. this is bloomberg. ♪

alix: here's a chart that should make everyone feel pretty bad. it is taking a look at when you are going to get the gender gap in improving and closing within different regions of the world. the global average is going to take about 100 years, but if you break it down by region, it is pretty grim. ,he east asia pacific region 140 years. this.you are working on what you think of this progress? lale: it is really depressing. appreciate it. on top of repo, we are adding on. i think what is really interesting is, especially in finance and insurance, actually swings worse than the averages. is of my biggest struggles you see these large companies say they are is no pipeline. there's no pipeline because you haven't invested in it.

i strongly believe instead of putting in quotas, like we need two or three diverse candidates, you know what? make the decision makers who can actually move the dial on hiring , to defy percent of their comp on diversity -- on hiring, 25% of their comp on diversity. money talks in our industry. make it direct. you know what? this guy got paid more because z. or she did xy loop johcmicap to a -- lale topcuoglo of johcm, very interesting take. this is bloomberg. ♪ [ dramatic music ]

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3 million light years in the making. woohoo! -yeah! alix: this is "bloomberg daybreak." i am alix steel. markets, we get housing starts, building permits in just a few seconds. not a lot of action and equity markets. european stocks.

in asset classes, not a lot of movement. the cable rate at session lows, erasing all of the gains it sought outside of the election. the spread in the u.s., 23 basis points, incrementally moving steeper. the housing starts dropping. if you are looking at building permits coming in strong, up 1.4%, we were looking for decline of 3.5%, and starts strong at 3.2%. also october revised higher by 4.5%. cabanapcuoglu and mark are still with us. i feel like this goes to the conversation that the fed going into the easing cycle did work for housing. housing is strong. is that the right thesis? mark: i think that is right. you've seen building permits rise over the last months. the improved ability to get a

mortgage at a lower cost, the lower cost of funds does make a difference, and there is no inventory in the overall housing market. -- now yous doing are seeing building permits continue to be strong. this is a fed that has seen the economy was too tight, bought insurance, and it seems to be working. lale: wait until -- alix: here it comes. lale: wait until they start controlling the silverlight -- the silver rate which goes into libor and would become a ofective half -- at the fact ef country.defacto mark: what this shows is the fed can impact conditions in the housing market. what they are also trying to do

behind the scenes is change how markets have operated for the last 20 or 30 or 40 years. there is another big overall industry push which is going on to try and move the market away from its reliance on libor, which is a flawed interest rates, and towards a safer repo rate. if the fed were to do that, if they were able to transition from libor, the fed would have improved monetary policy transmission and it could that impact the housing market more directly when it felt like conditions were too tight. from the fed perspective that sounds amazing because you strip out the credit component in the base borrowing rate. as a borrower what i rather borrow off something that has bank credit or something that is perceived to be risk-free? in theory i would like to borrow off of something that is risk-free and that should allow for whatever the fed says the rates are too high to lower them more quickly and therefore stimulate the housing market and

other parts of the lending market more directly. if only it were that simple and clean. there is a host of issues associated with this transition. lale: i was going to kick it back to you. the libor transition is focused on the fixed income market, but many of the equity guys or the broader market guys think it just happens. the lack of the credit risk component is critical. , i still credit risk do not understand how the market will price the credit risk. i know you have thoughts on that. mark: yes. this is a behemoth of an issue. the issue we are talking about is not something you can trade off of day in and day out. lale: let's quantify. what is it? $200 trillion. alix: i do not even know what that means. mark: a huge amount of money.

200 trillion dollars based off u.s. dollar libor. it is that deeply ingrained in financial markets. oryou have credit card debt auto loan debt it probably floats off of libor so you likely have exposure to libor and that index could go way. what happens of that index goes away? you have another rate which replaces it. what the fed has preferred is to have an overnight repo rate as the alternative to libor. the two rates are like apples and oranges. libor has credit risk and is deeply liquid in terms of derivatives and futures. the other has none of those. it is risk-free. it does not have a liquid derivative for futures market to help market makers hedge their overall cost. so what? if this rate goes away, the market will be left without knowing what a new benchmark could be. importantly, banks will not know

how to charge you the price of credit because they are so accustomed to utilizing libor. road the rubber meets the is banks have an incentive to make loans off of libor. why? because libor reflects unsecured bank credit risks. bank liabilities should fluctuate with libor. what is nice is if their assets fluctuate with libor. they like to make loans because they have an implicit hedge. now if you tell a bank your liability costs will still be like bank credit by your assets will float off of something that is fundamentally different, if you think about the 2008 financial crisis, libor and repo diverged substantially. how do i price that? if i no credit is rising in my cost of funds is increasing, i do not want my assets to fall. what i worry they will do is they will charge borrowers more to utilize -- which is

risk-free, as opposed to libor, which is risky. your mortgage cost, your credit card, or your student loan, you can find it will increase as a result of this transition good that is why there has not been loan generation off of this new index. it is a big sticky problem and :00 is ticking because there is not much -- it is a big sticky problem and the clock is ticking because there's not much time. it is also not the most inspiring index. alix: i am feeling really good. mark cabana, thank you very much. [laughter] we can work on something like that in the future. appreciate you spending time with this. mark cabana, bank of america securities. we want to give you an update on what is making headlines outside of libor. viviana hurtado is here. viviana: we begin tomorrow with an historic vote on president trump. a few uncommitted moderate

democrats announce how they will vote. so far they say they will vote to impeach. democratic presidential candidate elizabeth warren's backing away from her medicare for all plan. she now emphasizes the proposal would be optional, this for most of her first term as president, if elected. elizabeth warren has declined in the polls. there is support -- there is questions in for support for medicare for all hurts or electability. boris johnson is reviving the threat of a no deal brexit. up the possibility of a no deal split with the eu at the end of next year. eu leaders warning it is unlikely negotiators could complete the kind of deal johnson once in that timeframe. 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. viviana hurtado.

this is bloomberg. lale, do you have a trade in the u.k.? lale: we have a tiny bit. more looking at the financials and some of the consumer driven companies. we think if they follow what the republicans followed from a playbook point of view and spend a lot, then you can make a case. alix: did we learn anything about how to play these binary risks as they continue to drag on or is the specific? lale: we always say, one of my colleagues says you have to remain true to your process. our process is running our valuation to see with the upside/downside is. it just runs with that assumption. you just removed a big tail rest. it is still there, but it is smaller. you can make a case to become more positive. alix: do you feel -- where is the up?

is it e.m.? is it europe? lale: from an asset class perspective, i joke, but i think there is some truth when you almost one a barbell between equities and cash. i think credit is a no man's land and i think the valuations are too rich. in the equity side you could make a case for e.m. and you can certainly make a case for some of the asian and japanese equities. alix: hang tight. lale topcuoglu is sticking with me. it is the season for stopping -- for shopping. we will speak with kristen gall on how the shopping season is shaping up for retailers. that is coming up next on today's bottom line. interact with the charts we show on gtv . this is bloomberg. ♪

viviana: you are watching "bloomberg daybreak." sharesn in london with of hmc plunging as much is 20%. it is shorting the stock because of concerns about financial statements. representative for the companies did not respond for a request for comment. over to california where uber beat back an aggressive attempt to force it to treat drivers as employees. a federal judge declining to order the ride-hailing service to instantly convert drivers from contractors. the judge refused to throughout the case. it is that early test of a california law aimed at geek economies. will edgedicting it closer to volkswagen. in 2020 the japanese company expects to sell just under 10.8

million vehicles. the growth is coming from outside toyota's home market in japan. i am viviana hurtado. that is your bloomberg business flash. alix: time for bottom line. we take a look at companies were watching this morning. first up we are looking at fedex and amazon. joining us is bloomberg intelligence senior analyst. the headline as amazon drops fedex from its third party suppliers. what does this mean for fedex? lee: that is a great question. we do not know. the company is in a quiet period. we suspected it is in the tens of millions of dollars in terms of revenue. it will not be that significant to their bottom line. it is not in their numbers. expectationsus could come down a couple pennies. we do not think it will be meaningful for the bottom line. fedex has been stepping away from amazon for a while.

their groundrenew or express businesses domestically in the u.s. this is maybe a tit-for-tat on that. we do not think it will be that meaningful for the bottom line. alix: on the flipside used to have companies like fedex trying to put in more capex, but they want to compete with amazon and what will be amazon air, potentially structural change for the industry. issuesdex has a host of they are trying to work through, other it is competition or issues with their tmt acquisition in europe, getting that on track, or the headline risk out of china in terms of list for on a naughty entities working out of asia. they have a lot of headwinds facing them. sentiment on fedex is extremely low and investors are losing -- with theirite

ability to right the ship. alix: the other company we will -- it has rapid 10 seen an increase in consumer spending year-over-year during this year's peak holiday shopping season. joining us is kristen gall, president of rakuten. what are the trends, what do you see, how is the holiday season stacking up? kristen: the holiday season is interesting because we have one less week between black friday and christmas this year. what we are seeing is unprecedented deals at a massive amount of retailers. i think you're definitely seeing marketplaces pop up in a vague way. there deals are aggressive but an interesting trend is in the direct to consumer world. thatve a lot of retailers

are increasingly taking a place in the retail space this year. alix: where are they shopping? will it be e-commerce? will it be retail stores? we saw a lot of aggressive e-commerce shopping around cyber monday. cyber monday is the day, even more than black friday, everyone came out to play. timethe consolidated between black friday, cyber monday, and christmas, it will change the patterns of consumer spending. there was a little bit of a lull while people got ready for the christmas holiday season and this week it is getting aggressive again. this is one of the last days for people to shop online before christmas when things get shipped to them before christmas. what we will see is a gradual shift to things like buy online and pick up in-store and more in-store shopping and more toward retailers like amazon that offer one-day shipping overnight. lale: how do you incentivize

consumers to come to you and versus going directly to the retailer itself? kristen: we do a few things that are attractive to consumers. the first is we pay cash back on transactions at 3500 plus stores, which in its own right is attractive. the second is we have all of the stores consumers want to shop at. we have a broad spectrum of stores. everyone is very well represented. the third thing is we amalgamate all of the deals from all of the retailers. we allow people to stack cash back on top of retailer deals that already exist. if they have a coupon code or a sale, people can stack cashback on top of that sale and then use a rewards credit card on top of that and the deal stacking gets aggressive. a lot of value seeking customers and people looking for the best deal. alix: how do you make money? cashback is a real thing.

somewhere you can make one for one. what is the business model? kristen: we have 13 million members. a very large audience of people. companies pay us to send transactions to them, and then we share that commission with our customers. it is a pretty simple business model where everyone wins. they get the traffic and our members when in terms of getting the cashback. alix: if you have retailers that get better at their e-commerce section like walmart and target has, does that step over you, they do not need you as much anymore? not necessarily. there is a subset of customers for whom this is an attractive value proposition and they shop this way regardless of who is or who is not on our platform. they will shop with the people on our platform because they are loyal to us. even if people get better at omni channel, we are playing

increasingly in the in store cashback space. we offer not only online but also in store cashback. there are groups and audiences these retailers cannot reach without us. alix: how loyal -- if consumers are loyal to you, how loyal you notice they are to the brands within your website? kristen: it depends what brands are offering. our consumers tend to be malleable based on the levels of cashback and that is one of the things we do best. we are able to drive consumers between different brands because of different cashback offers, and that is something retailers are able to influence the way their business runs on our site based on the level of offer they put there. alix: how about competition in the cashback space? howdy real with -- how you deal with that? is the race to the bottom? kristen: it is not because what we are able to do is create brand experience on our self.

it is a little different from a race to the bottom value seeking audience. we are able to tell brand stories and get across things retailers want us to get across. toaddition, we allow people surface deals to different groups of consumers and target them for things, which means from a value proposition perspective we are connecting consumers with the right offer for them at the right time. alix: thank you so much kristen gall of rakuten. are you finished your christmas shopping? lale: i am done. online. alix: you headed in october, right? investmentbeing an bond trader, i am good relative value. [laughter] i know exactly what is coming for sale and where on a calendar notification. before i go to the gym at 5:00 a.m. it pops up on my calendar. alix: how do you know that? lale: the companies advertise.

digitalre a few electronics i wanted to get and i know exactly when they go on sale. alix: i did that once, for a vacuum cleaner. lale: [laughter] i am learning a whole new side of alix for the show. alix: so great to hang out with you. thank you for joining us. lale topcuoglu, always a pleasure to have onset. andng up, more on boeing the key levels of support you want to watch today. if you're heading out in your car, tune into bloomberg radio heard across the u.s. on sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: time for technically speaking. bill maloney joins me now. .n to bill at squa

you are looking at boeing? bill: we talked about yesterday that 320 and 324 was your support. current bid around 323. 320 is your last dance with the bulls. if that fails, you're looking at 200 to 292. alix: let's wrap it up with tesla. it hit its highest level yesterday since 2017. bill: tesla is down around 1%, it was up 6.5% yesterday. stocks up 113 yesterday -- stocks up 113% from june lows. what you want to look at is these highs which date back to 2017. alix: that wraps it up for bloomberg america's. -- four bloomberg daybreak -- america's. ♪

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

record-breaking equity market rally. postelectioning gains, hard brexit risk back in focus. boeing looking to save cash suspending 737 max production. .1% onfutures advancing the s&p 500. euro-dollar going nowhere. treasury yields on the 10 year 1.86. hard brexit risk coming into sharper focus. >> still looking like a hard brexit. >> hard brexit. >> no longer beholden to the hardline brexiteers. >> the majority allowed him to go either way. >>? question marks as to what boris johnson plan will be. >>