tie up, relying on each other to adapt to trickle cars -- to electric cars and a cushion to economist vehicles. bad.htakingly e-commerce squeezes profit margins. and three charts show things could be betting -- could be getting better from small caps to emerging markets. welcome to "bloomberg daybreak" on this wednesday, december 18. volume solo. s&p -- volume so low. yesterday -- crude rolling over, so watch that risk off field. time now for global exchange. we bring you today's market

moving news from all around the world. delhi, newg to new jersey and washington come our bloomberg voices are on the ground today's top stories. in asia, you had the pboc lowering the rate it charges on shorter-term loans to lenders. index added 150 billion yuan into the banking system. joining us is tom mackenzie. is this the start of an easing cycle, or a short-term term liquidity crunch into the new year? tom: it seems like more of a short-term liquidity crunch. we are looking ahead to january, what it looks like you will get a withdrawal of cash out of the financial system here of about $450 billion. they take that liquidity out ahead of the chinese new year, which comes in towards the end of january. it does seem like it is more of a seasonal effect.

more broadly in the economy, credit has been tightening. we saw today from the pboc was some gradual measures to try and address this queasy liquidity, and a couple of basis points and a seven-day reverse repo as well. about 28ly, you got billion dollars injected into the financial system from the pboc. most of the economists we've been speaking to think you are not going to get a benchmark rate cut because they are concerned about inflation. you got very high consumer prices in china, on the back of -- of pork because prices because swine fluke continues to decimate the population. you will not get a benchmark rate cut, but you may get more tweaks around the edges. more gradual cuts in terms of what we saw today for short-term

repose to -- for short-term repos to ensure there is liquidity, particularly leading up to the new year. alix: thank you. now we go to india, where that controversial religion-based citizenship act is being examined by the supreme court. joining us is the bloomberg southeast asia editor. what do we learn from the court? reporter: the court agreed to look at the legality of the citizenship law after petitions filed by activists, lawyers, muslim organizations across the country. we are expecting the move may calm protesters. they say it discriminates muslims from neighboring countries from seeking citizenship, but allows other religions in. the government isn't backing down, nor are the protesters who want the act repealed.

we are not sure how the court will rule. for now, we will just have to see how the security forces and the government respond. alix: thank you so much for that update. now we had to paris, where psa group and fiat chrysler agreed to merge in a deal that will create the world's fourth largest auto manufacturer. the europeanw is bloomberg transport reporter. what do these companies get from one another? scaleer: well, they get and they get preparation for big transitions in the electric car industry and autonomous car industry. peugeot,nt ceo of neither company is well prepared

for an electric future, and they will have to figure out how to make money out of electric cars. second, they are both quite reliant on the european economy, which is slowing down, and where car sales are plateauing. in the world's biggest car market, china, psa sales have been basically tanking in the past couple of years. finally, you have a new company that will have the french government as a shareholder closuresover potential or job cuts. we will see. alix: thank you. now we go to germany, where german business expectations improved for a third month in december, possibly a sign manufacturers are starting to find their way out of a year-long downturn. joining me from frankfurt's

daniel schaefer. we love this indicator because it also looks at future expectations. what were some of your biggest takeaways? daniel: as you said, it offers a glimmer of hope for germany's manufacturing sector in particular, which had a terrible year in terms of following orders and falling production. it is also with the investor sentiment that has been improving for germany and for its outlook. but not all is well within the german economy yet. we have recently seen both industrial production, as well as factory orders number, continue to fall at the beginning of the fourth quarter. some of the companies still remained very cautious when it comes to their outlook for 2020. we just had a stark reminder of that today, when german

came outring company with a warning for 2020. slashed their sales forecast for next year. all in all, it is still a mixed picture for the german economy. alix: thank you so much. in the u.s., fedex's nightmare before christmas. the company suffering another blow when it missed earnings estimates, blaming weak international demand, plus trade tensions. >> it had significant effects due to continuing trade disputes, including reductions in international airfreight and freight soldnd b2b and domestic shipping. alix: there's two ways to look at it. one is we have a bottom for two is it is really bad.

management has done a poor job forecasting the earnings expectations. there's a lot of things coming into play here. they are waiting for revenues to come into the network to pay for it. they did see about 60 million packages over the last weekend, so things are looking good. also, we all knew about the compressed time for thanksgiving and christmas, during the peak season. what really happened here was that the peak season was better than they thought. they delivered something like 37 million packages on cyber monday versus their expectations for 34 million, so that a higher cost per package and really weighed on their ground margins. at the end of the day, the company is making a lot of investments.

we are relatively bullish on the long storm -- on the long-term story. as was noted a number of times, the industrial economy impacted tend2b deliveries, which to be more profitable for them. thank you very much. we rounded out here in d.c., where the house will debate for six hours before holding votes on two impeachment articles against president trump. joining with more from capitol hill is kevin cirilli, bloomberg chief washington correspondent. what do we expect, and what is the reaction from the white house? kevin: the white house is ready to move full steam ahead. president trump will head to michigan later this evening for a campaign rally that is coinciding with precisely the exact time when the house is likely to vote on impeaching president trump. that vote is expected anywhere

between 5:30 and 7:30 new york time, the president's remarks in that last hour. here, not 98 -- from :00 a.m. is when the house will reconvene. kick off six hours of floor debate, where you are going to year from various members in both parties on the issues of impeachment. we might be getting impeachment managers today as well, but we also might wait a couple of days. pelosipelosi -- speaker will name impeachment managers as prosecutors in the senate trial. the houselosi, during democratic caucus meeting, not only talking about impeachment, but also discussing the government funding bill, which keeps the government hoping that .hey advanced

republicans also starting to strategize for how that senate trial in the first few weeks of 2020 will play out. as of now, the president is in no risk of being removed from office, so after today, he will likely become the third president to be impeached. alix: thank you so much. another story we are all watching this morning, most people wouldn't really describe millionaire investor stanley drake and miller as timid, but that's exactly how he describes himself. that would positions -- we have negative real rates everywhere and negative absolute rates a lot of places, monetaryhat kind of stimulus relative to the circumstances, it is hard to have anything other than a constructive view on the market risk and the economy intervening, so that is what i have.

alix: we will have much more of that interview coming up. coming up right now on this program, more of your morning trade analysis on the markets in today's first take. this is bloomberg. ♪

♪ alix: now time for bloomberg first take. going to me from our in-house team of wall street veterans and insiders, vincent cignarella, former fx and rates trader and voice of the bloomberg audio our, andmian sassower with us also, evan brown, ubs asset management head of multi-asset strategy. the reality is, there's no volume right now in the markets. what would you do? vincent: just wait and see at

this point. people are a really not involved. i would suggest people carrying any of the profitable trades they have into the end of the year. it is not a time you really put any stuff on. it's a little too dangerous. most traders are just executing flow. when customers want to do something, they are executing as best as they can, but not really taking much risk on. damian: you mentioned the end of the year. for me, it comes down to the yuan. cut a going to see a rrr soon as next year. it speaks to the $2.8 trillion $2.8 trillion-- liquidity gap. it is probably going to add some appreciation pressure, upside pressure to the yuan in the near-term. evan: just grateful about how this december is different from last december. [laughter] alix: i've appreciated the slow

news flow, i've got to say. evan: there aren't too many catalysts left in the calendar for the rest of the year, so everyone is really preparing for the new year, and so are we. at a continuation of a broader risk backdrop, a positive risk backdrop into the new year, but of course, soon we will get into the u.s. election and have some bumping us as we go forward -- some bumpiness as we go forward. yeah, itryone is like, is going to roll over, but how much? advisors,acro risk over 3% or something crazy. do you feel like there's a lot of calls out there? think in the trader's take yesterday, we spoke about rates going to 2.15% in the 10 year. i think the calls are skewed to rates lower, which i would

disagree with, actually. as evan said, we will have some positive risk in the first quarter. it's going to be a bumpy road. i think things become clearer in the second quarter, when we are likely to get middle-class tax cuts. the first quarter is going to be a little dicey, but i think by and large, we will see yields higher going in the first quarter. damian: i think you've got to differentiate. is basically saying it -- isk on, where coelho's calling for a double bottom. have beeneople calling for that, see will be interesting to see if that materializes. he at least hedged himself there, for sure. evan: i think the vast majority of forecasts are pretty narrow for yields, and very few people are an exception, but i would

think that we break out into the range one way or another. it is kind of binary. either you have a bearish outlook on the u.s. economy and yields go lower, but we are of the view it is not going to be so much a fed story. it is going to be a steepening story is the global economy improves and the fed is letting the economy run hot. damian: breakevens have a david moved. to make these ash breakevens haven't even moved. haven't-- breakevens even moved. to make these calls, it has to move in some direction. i have a hard time with that. one day, copper matters for global growth. the next day, it is not a good indicator because china is over supplying the market. i just don't buy that easy correlation. vincent: it is a bit of a dodgy correlation, to be honest. something like fedex it's a better look than copper where the u.s. is going.

u.s. consumer data, we will talk about this a little later, but u.s. consumer data is rolling over, not in a positive way, both from an income and spending side. that needs to pick up from december going into january to see that risk on momentum carry because if we are not seeing it anywhere else in the world, u.s. income is declining, spending is declining. we saw a big disappointment in retail sales for november. will we see the reverse in december? so far, the first look into january is not too pretty. my questionso, really circles back to trade. kaplan was talking about this yesterday. this trade thing is not going to go away. we're going to have uncertainty with china and the u.s. for a while. also, robert lighthizer speaking on fox yesterday, now coming after europe. how do you guys think, how do you price that for next year? that where we are seeing the binary call? evan: i think you can't project

exactly what is going to happen on trade. no one feels fully comfortable. we've got this u.s.-china phase one, a very aggressive agricultural purchase target. if china doesn't meet that, maybe trump steps up a tax. you can't base asset allocation on thinking about whether trump is going to tweet new tariffs at any given time. you just have to follow the underlying monetary policy and fiscal policy dynamic in how the data are coming in, and knowledge those risks, but ultimately, we think the first half global economy is going to be picking up. the lagging impact of monetary policy, do you political risk getting less bad on net should provide a better backdrop in the first half. damian: low volumes aside, it has been some stellar turnaround in some em currencies and equities. em equities are up 14 percent

year-to-date, a far cry from the , 19 of 21m currencies are up, led by the commodity currencies. peso.n peso, colombian alix: don't you need a weaker material dollar to get that juice? damian: i'm a pessimist. you know i don't believe that. [laughter] damian: when it comes to emerging markets, i am a pessimist. it is all on very thin volumes. you can't really trade these trade stories. you can't trade the trump tweets , and i think there's going to be a reckoning come the new year. evan: i think you see it go a little -- vincent: i think you see it go a little further. look at where the mexican peso has gone on the usmca news. this could become on other source of product for u.s. suppliers if they walk away from china.

europe, to me, i think is toast. when you look at the trade situation, it is the perfect distraction. it is like the old cold war, when russia and the u.s. were fighting. we will fight it out in vietnam. if china and the u.s., we will fight it out in germany. if they don't put huawei in, we will tariff the cars. for the u.s., if they let huawei in, we will tariff the cars. i don't see a way out, to be honest. alix: that is going to be a rough one, to be honest. vincent cignarella and damian sassower, thanks a lot. evan brown of ubs asset management will be sticking with me. if you want to look at charts throughout the program, check out gtv on your terminal. this is bloomberg. ♪

viviana: this is "bloomberg

daybreak." twoill be a 50-50 merger of auto dynasties. fiat chrysler and psa have signed off to create the world's fourth-largest carmaker, led by psa's ceo. olufsen says sales were significant lower-than-expected. analysts question if it can continue as a standalone company. -- will buy a business from cigna according to "the financial times." cigna would get a cash injection , needed after a $6.7 billion takeover last year of express scripts. alix: another company i am watching this morning's tesla. the carmaker may actually cut the price of its china made model three sedan by 20% or more

next year. tesla is betting the move is going to lure some buyers in the world's largest market for electric vehicles. ev makers in china are struggling with an unprecedented slump. you've got sales of electric cars that have fallen for months after the government scaled back subsidies, a very competitive environment that could put pressure on some of the chinese electric vehicle companies. one has already been totally decimated in terms of market cap, and has already had to lay off a lot of its workforce because of that. tesla now ramping up the pressure. coming up, loving be unloved. the bulls are coming for some of the market's biggest laggards. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i'm alix steel. the markets are sleeping because nothing is actually happening. volume superlight.

yesterday, the s&p saw the tightest range in about two years. of the board, you can see the euro is also still down, maybe off the lows of the session after the better data out of germany. the vix is something to watch. someet somebody did play call options on the vix, seeing more volatility pickup in the first quarter of next year. someone is looking for volatility to pick up and the equity market to decline. the curve stays steeper, 24 basis points is where we sit. global risk seems to be easing, and the bulls seem to be coming out for previously unloved assets. sarah ponczek is checking out a closer look for us. sarah: optimism has certainly been coming back in force. tone,e you a sense of the take a look here. this is the bank of america

merrill lynch global financial stress indicator. as you can see, lowest levels since may. if it is above zero, that means financial stress is above where it normally is. below zero, it is below where financial stress usually is across global markets. clearly, now it is well below zero. now investors are saying market laggards should really be playing a game of catch up. one area of the market that could would be emerging markets. over the past decade, it's , andy been the tina world that being the u.s. if you look at the relative performance ratio of the msci emerging markets index versus the s&p 500, it hit a 16 year low. that's where we are now. now you have the likes of edward jones overweighting emerging markets, at the same time blackrock is urging investors to get exposure to cyclical assets that also includes emerging-market. another area we could see do

some mean reversion and get an uptick as laggards start to outperform, that could be value. we've seen many had fakes over the past decade. however, many are questioning whether this time could be different. one indicator they are looking at is the yield curve. if you look at the spread between the three year yield and the 10 year treasury yield, we got i steepening after an inversion earlier in the year. the two have been roughly related, so now some investment shops are saying this could be different if we see the yield curve steepening. that is signaling a brighter economic outlook. alix: great round up. thank you so much. still with me, evan brown of ubs asset management. how do you look at it? do you by the charts? i buyi by the charts -- the charts in that some of these can pick up. u.s. investors have left foreign markets over the last few years.

missed investors have some of the u.s. rally we had this year, they are going to look at the laggards and say, ok, where can we put our money? what's cheap? it's going to be emerging markets, japan, and to some extent, europe as well. these economies were hit the most by the trade war, and now the environment is not getting worse, so we should see a return to those. alix: is this just going to be a first half of the year story? evan: evan: it could be more than a first half of the year story because as we get into the second half, there will be more ,ocused on the u.s. election policy uncertainty, different candidates with different views on how we should have u.s. economic policy, u.s. corporate taxation. u.s. markets are going to have to price in some risk premia around that uncertainty. ex-us marketsfor

to outperform. we've gotten use to political risk outside the u.s. come up -- the u.s., but now becoming more prominent inside the u.s., that speaks to that rotation even more. alix: when you take a look at the steepening yield curve in the u.s., does that apply elsewhere? do you like asian banks, emerging-market banks, european banks? is that a theme throughout the globe? evan: i think so. we are becoming more optimistic on european banks. we really like japanese banks because the bank of japan has been one of the first to really recognize having a flat yield curve and having negative rates is really damaging their economy in terms of bank profitability. as much as much as they talked officially, the actions -- they are dovishly, the actions steepening the yield curve.

they are going to be dialing back. they have been, and they are going to dial back asset purchases and long end of the curve. we actually think that is very positive. there is a shift happening among central banks, even the swedish. they are not great, but they say we are going to raise rates back to zero. this shift from central banks saying we don't want to cut rates further into negative territory, that is going to be a tailwind for global banks in the next year. alix: my distinction that i want to understand is, does that mean that we just don't get lower from here versus we are going to get a nice bounce in growth? evan: i think we are actually going to get a nice bounce in growth. alix: does that come from a real underlying impulse in the world, or is it still central bank manufactured? impact ofs the lagged all of the monetary policy

stimulus we have seen so far. it is not just the fed. we have seen global central banks with a wave of easing. that takes effect on the economy with a lag. so now central banks will say we don't need to do that much. let's let the policies we've done already take effect into the economy, and that is going to be the driver of a global economic rebound. alix: do you like u.s. equities? for in comparison, i guess. evan: u.s. equities have positive returns as may be a single digit percent, but the real action next year is going to be outside the u.s. alix: do you feel there is still opportunity for that in the u.s. , if you break it down a little bit? is there more beta here? evan: the u.s. is more of a rotation story. it is moving more towards the banks, more toward industrials and the procyclicals as people gain confidence that the economy

is healing. rotation story in the u.s., outright beta outside the u.s.. alix: we talk a little about this earlier when it comes to the 10 year. you think we are range bound. evan: yeah. as people feel better about the world, the term premia, long-term yield should reprice higher, and our view. you're not going to get any action from the fed. the fed is going to let the economy run hot. so your view on yields going higher has to be based on these global economic issues, confidence in the global pickup as opposed to any thoughts that the fed is going to be hiking anytime soon. alix: does any of your call revolve around a shift from qb to government stimulus -- from qe to government stimulus? evan: it does. we think there is a greater appreciation that monetary policy stimulus is running out the zeroand that at lower bound in many places, it is doing more harm than good.

there's going to be more demand on fiscal. you're seeing it in japan, and the u.k. we are all waiting for germany to do more. alix: it feels like the green investment kind of sideswipe some of those rules, maybe. evan: which is a really interesting story i think is underappreciated. europe is at the forefront of green infrastructure, and that is going to be coming through over the coming years. everyone wants this big bang and german fiscal stimulus, but we are moving in the direction of moving in that the direction of travel is very clear. in general, this transition from monetary to physical is another part of this story. alix: evan, good to catch up with you. evan brown of ubs asset management. we want to give you an update on what is making headlines outside of the business world. viviana hurtado is here with first word news. viviana: the democratic-controlled house chamber is expected to make donald trump the third president

to be impeached. lawmakers will consider two articles of impeachment, abuse of power and obstruction of congress. then it is sent to the trial in the republican-controlled senate, expected to acquit the senate. the trump administration is ratcheting up pressure on iran. u.s. actions have already driven irani and oil exports to record lows. the new targets include global shippers and exporters. president trump is trying to squeeze iran to force the country to negotiate new limits on nuclear and missile programs. --,r last week's political former u.k. prime minister tony blair will take the labour party it needs a total change. he will tell an audience in london labour cannot sibley carry on with jeremy corbyn's policies under a new leader. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm viviana hurtado. this is bloomberg. alix: coming up, goldman gives wework a hand. more on the effort to bailout wework in today's wall street beat. check out tv . you can watch us online, interact with us directly. if you miss something, you can always go through and check it out. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." in premarket trading, shares of fedex plunging. the delivery service cutting profit forecasts for the second straight quarter. weak international demand has hurt fedex, plus the company has

ramped up investment to handle the surge in e-commerce deliveries. deutsche bank calling fedex quarterly results "breathtakingly bad." bankrupt california utility pg&e taking another step toward restructuring. the judge in the chapter 11 case signing off on two multibillion-dollar wildfire settlements. now pg&e has to convince california governor gavin newsom. he opposes the reorganization plan and could block it. the latest star wars movie coming out on friday is on track to be the worst reviewed film in the nine picture saga. tomatoes,to rotten "star wars: the rise of skywalker" receiving positive reviews from only 50% of critics surveyed. still, there are estimates it could rake in in north america up to $230 million at the box office. that would make it one of the top five debuts of all time. likely in attendance, alix steel. alix: thanks so much.

you bet, to a copy and friday. i don't care -- 2:00 p.m. friday. i don't care if rotten tomatoes has bad reviews. fund up, softbank's vision politicaldescribe rivalries and harassment issues. plus, wework clinches new financing in the fundraising push led by goldman sachs. and deutsche bank coaches barclays executives. the german lender said to be catering to hedge fund clients from rival barclays. joining us is bloomberg's sonali basak and michelle davis. i feel like i have read so many amazing articles about softbank. walk me through what we have here. sonali: this is a truly amazing story by our colleagues. not just the things we've known about massi as she son -- about masayoshi son.

one employee alleged that one of the executives, the employee was mormon, and the executive told him to go back to utah and get more wives. the executive denied doing that, while others say they don't know whether massive son -- where whether hen't know is going to be in rates are not. michelle: they described him as someone that is really unpredictable. he says i believe in your fund that we believed in neumann, people will fire on all cylinders. this one way that they described his strategy, as just throwing money at things to scare off competitors. people have talked a lot about how -- sonali: no one wants to pick a fight with a crazy person.

michelle: people have talked a lot about how vision fund might be responsible for inflated values in silicon valley, but i've never heard it described that way, as just throwing money so it scares everyone off. alix: a whole culture of weirdness. we all complain about bosses all we want, but a culture of weirdness? i don't think i've ever heard someone describe something in that particular way. sonali: every anecdote is worth reading. alix: let's get to wework. this is about goldman sachs following through with their financing for wework. is it enough? what is it? michelle: as you will probably remember, wework got rescue financing from softbank. this $1.7 billion line of credit is the first step in that, refinancing an old line of wework tot required pledge cash as collateral. it means they automatically have $800 million of cash freed up.

the reason goldman was comfortable doing this whereas lenders before were very skittish is softbank is going to be the borrower listed instead of wework. they have this guarantee that if something happens to wework, they are still going to get their money back. sonali: something interesting here is a lot of japanese banks have been getting really skittish on softbank, with so much exposure. it really creates an opening for goldman sachs to play a bigger role in the larger life of softbank, which is still the 100 pound gorilla in the room. huge alibaba stake, lots of startups still in a portfolio. goldman sachs feels it is ok because softbank is on the hook if something goes wrong, but that is good because then goldman sachs can take away some business from japanese banks that don't want to lend to him. sonali: it is risky, but iferally good for business

they can create credits that investors are more comfortable with. i think everybody walks out a little more cleanly than the summer. michelle: the other thing is that wework really are pivoting. it is no longer this tech company growth story. they are saying where i real company focused on profit. alix: we may keep the chairs we put in our office two weeks ago and not refinance it. good to bank -- deutsche bank is the last one, poaching employee is away from barclays. sonali: i think what is interesting is when you look at barclays, barclays is kind of in the second tier of prime brokers , right behind morgan stanley, jp morgan, and morgan sachs -- and goldman sachs. now you have bnp trying to take check --now you have a now you have deutsche trying to take shares away. michelle: everyone thought this was going to be that

opportunity, but now the fact that deutsche is poaching from barclays means it is not as easy as they thought to take the share. jp morgan is one of the banks that has also said it is going to benefit from deutsche not being as strong in this area. they've been trying to be number three inequities after goldman and morgan stanley. sonali: they are saying the next stop is $1 trillion in businesses. alix: guys, thank you very much. in today's off the beaten street, this is what everyone is talking about. billionaire hedge fund manager riffing on his wealth while in the back of a new york taxi cap, and the driver was the so-called cabbie to the stars. >> on the highest ending person in the world of finance -- i'm the highest earning person in the world of finance. >> explain that to me. alix: and explain he did. last year, the bloomberg billionaires index ranked him the fifth highest earning fund

manager in the world. he tells bloomberg it was a spoof interview with the taxi driver. the driver says he was "very generous." i hope so. coming up, we look at corporate profits in today's trader's take. 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. joining me is vincent cignarella of the bloomberg audio squawk. you are looking at corporate profits, which i love. vincent: everybody looks at

earnings, and when we look from one quarter to the next or year-over-year, we lower our earnings expectations. when we beat the expeditions, stock prices go up. but inevitably, it is about profits. when you look at corporate profits year-over-year before taxes, they have been declining. i'm not adjusting we are going into recession, but it just gives you an indication of its corporate profits continue to slide, what could happen to the economy. we have been seeing slower consumer numbers. slower consumer spending, slower personal income, slower retail sales. all of this weighs into the story. what happens in december? if corporate profits continue to decline, you have one of two things. to passporates be able higher costs to consumers to raise the profitability specter? it suggests not. alix:alix: i feel like we have not seen that path are available.

you also had labor costs higher come up activity moving lower -- higher, productivity moving lower. vincent: and shrinking disposable income. this is going to be an interesting mix. we will see how far this goes into the first quarter before we hopefully get a middle-class tax cut to lift us up a little bit, for political if not i can mike reasons. and we will's -- if not economic reasons. and we will see how the fed response to this. alix: just add corporate profits to their 17 mandates. vincent: one other thing they need to keep an ion. [laughter] connors,ing up, mark credit suisse global head of risk advisory, will be joining us on where hedge funds ♪ are actually positioned. -- hedge funds are actually positioned. ♪

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

december 18. here's everything you need to know at this hour. >> the pboc is selling 150 atlion yuan, reverse repos 2.65%. alix: china injects into money markets to help with the end of year liquidity crunch. >> it does seem like it is more of a seasonal effect. more broadly in the economy, credit has been tightening, and that is a concern. >> this quarter has seen significant effects on the industrial economy due to continuing trade disputes. alix: fedex gets crushed. a deutsche bank analyst calls it "rest achingly bad. -- calls it "breathtakingly bag." >> there's really no sugar coating at time around. the management has done a poor job at forecasting their earnings expectations. alix: the company says earnings will be no more than $11 50 since our for the fiscal year --

no more than $11.50 an hour for the fiscal year. and creating the fourth largest car company. >> there's a lot on the current leader. out howl have to figure to make money off of electric cars. dealing with stricter emission rules and an industrywide push into electric and autonomous vehicles. and the house make history today as it votes on articles of impeachment against president trump after six hours of debate on the floor. the presidentow, is at no risk of being removed from office, so after today, he will likely become the third president to be impeached. alix: president trump sent a letter to house speaker nancy pelosi, saying her party will be punished by voters in 2020. your destiny.

alix: for all you star wars fans like me come up repair for this appointment. apparently it is set to be the worst reviewed film of the nine. menace" hadantom worse reviews on rotten tomatoes, and yet i am still seeing it. the market is sleeping. there's nothing going on. not a lot of action. s&p futures pretty much flat. you did have better german evo data, yet that is not reflected in the currency. yields go nowhere. there's some disparaging calls here. when it dispersion comes to where rates are going to settle. joining me for the hour is romaine bostick. are you going to see star wars? ine: of course. i think i've seen most of these. i didn't see the last one. i found it hard to believe that

this was worse reviewed than "phantom menace." alix: no, apparently "phantom menace" and then this one. i don't understand how the third than thiss any worse could be. romaine: i saw the preview for this, and they are clearly appealing to the older generation and the nostalgia. they are definitely going to kill see 3po. sorry, spoiler alert. alix: what? romaine: just from the previews. this is value-added news. alix: and you just called me old. [laughter] alix: and you are wearing a bowtie, which i appreciate. romaine: absolutely. merry christmas. alix: there's a few weeks left in the decade, and investors are taking positions into year-end. if you take a look at where everyone is putting their money, looking to move into value, dividends, trade activity over the last day. getting out of things like momentum and a little bit of leverage. ,oining us now is mark connors

credit suisse global head of risk advisory. are you going to see it this weekend? jar, billy dee williams, those names but my heart warm. i don't think we will be seeing it right now. alix: for 2020, how are markets actually positioned? mark: i think people have pulled back, and i think our data shows hedge funds have pulled back leverage throughout the year, especially quant funds. trading these unique factors or different types of idiosyncratic behaviors, it's not there. it's been a beta market. it's been fed pivoting in march, acting in june, and really laying the hammer down with this most recent repo announcement, where they took helicopter ben's 2002 paper and brought it to the room.

we will paper over year-end liquidity so you don't have to worry, but still structural issues happen. romaine: banks. why? mark: not just because i work for a bank. if you listen to our european analyst, he is saying that on the value proposition, u.s. versus europe, it got to such a level, and given where coupon and value interest lays given the growth environment, where do you have value? especially in banks. that is where the target is. romaine: that is going to be supported by the rate environment, though? overtakes -- and if you look at the banks, they are switching to above management. -- they are switching to wealth management. alix: what i am looking at is

how positioning affects the liquidity in the system versus the risks in the repo market. we had an hour long discussion yesterday about repos. ofs is what lale topcuoglo johcm said about the risk. lale: it speaks to the overall risk position and where you the risks may lie that you're not seeing in your credit spreads. we have gone a little bit more bearish on credit given where the spreads are since basically the end of september. we've actually increased our cash allocation. alix: so one, you get more liquidity, therefore you reposition, or this is reflecting something bad coming down the pike. romaine: one thing about what the fed has done --mark: one thing about what the fed has done, they are reacting to liquidity by the banks. you have this monster central bank saying i've got it, but can you distribute credit equitably to all of the players? that might be what is influencing people's posture on

credit. does everybody have access? does one central-bank have the validity to distribute it? that i think is to be seen. romaine: when you consider the run-up we had pretty much across all asset classes this year, do you look at it as being a healthy run-up, particularly in light of what people are expecting for 2020? romaine: let's take fundamentals --mark: let's take fund metals. all measures are pressed, whether it is p/e ratios, spreads. as far as healthy, there's not much meat left on the bone. that, we would say, is less attractive. what you are doing is really factoring in a pretty clear glide path to a continuing of what has been the longest run we had in the history of modern finance, as far as the economic recovery. romaine: but you are not expect enough to fall off a cliff or anything. the glide path may be lower than anything we had in 2018 -- i think the glide path

into 2020 is risk to the upside. one thing we can say within credit suisse is positioning in the active funds is so like that that is a tailwind. structurally, there's a tailwind. fundamentally, it's long and. the tooth. that's as good as it gets -- fundamentally, it's long in the tooth. that's as good as it gets in the environment. let's talk about asset classes. they've made money on tech and beta. the hedge funds that are in the macro space, a lot of headlines about micromanagers -- about macro managers. the top macro fund is up about 12%, 15%. they become tactical. they are playing the central bank. they are playing the moments because the trends, as we were

talking about, are long and narrow. it is tough to make money on that, but there are definitely opportunities. yne you mentioned, the cn move, if you overlay the equity markets, every time it appreciates -- every time it depreciates, equity markets go up. that i think you will see some macro funds go after. romaine:romaine: so is this a macro driven market in the short term? are the fundamentals for individual assets going to be a little bit less important? mark: i think it is absolutely macro driven. it's been all about central banks and populism trying to offset low global growth. had administrations and central banks really using their levers to offset what has been a declining rate change and growth. alix: what is everyone going to have to cover? romaine: they've already covered a lot --mark: they've already covered a lot.

the short book, it's rotated. we had the largest covering of value names that were consensus shorts after the repo market resettled in mid to late september. the run that we had on shorts was one of the more painful profit scenarios for hedge funds. what do they still short? index because the idiosyncratic went away. old economy, still little bit. but your point is taken. they are short less things right now. back to macro market, when you have liquidity unleashed by the fed in a way that has never been done before last week, when they said coupons are back on the table, that sounds more like if engaged, would aggregate what they said is not qe4 because they are going after duration, as our analyst at credit suisse said. the point is short at your peril

at this point. alix: to that point, does it matter that it is not qe4? any economist is going to argue and say it is not qe4. for a hedge fund manager, does that actually make a material difference? mark: i think the nuance between bills and coupons is meaningful, stayingn, going back to in my lane in positioning, our analyst did a wonderful job unpacking how this all works. the structural issues remain in repo. arguably, the fed may not be able to address it without buying coupons, so i think that is what hedge funds are looking at. romaine: real quick here, there has been this argument that it is not qe4 because it is primarily in bills. there's also an argument that they are creating a huge distortion in the market by only focusing on the short end and not doing a little bit more buying in the midterm and even

going out into the long-term of the curve. what do you think of that? mark: i think the big announcement in august that the treasury was issuing $800 billion in bills, the largest issuing ever come of the fed is basically now doing vendor financing. the distortion i think is basically not a distortion. it is just not offsetting the fed easing. offset all of the work the fed is trying to do. romaine: now you have the government essentially playing the market role on the short end. during qe, you had them playing the market role on the long end. is there a way out of this? mark: how much time do we have? [laughter] mark: that is the hazard. they tried to do qt. alix: there's no way. how do you pull that back from the repo market unless you change all the rules? mark: the data suggests want to go into this level of balance

sheet to unload it, there's repercussions. romaine: just to be clear, the way a lot of folks are looking at this is still sort of bullish for equity assets. mark: near-term, absolutely. romaine: so why not ride this train until the fed finally pulled the plug? and to that point, we had some calls on the vix. you can't hedge in that way because you have that in the background? mark: we were talking to our derivatives team last night on the way out, and asking, are there still the vol harvesters? the february 2018 spike took out the more speculative vol harvesters, but people are still there making money, whether it be the asset managers or professionals. alix: always good to have you. mark connors of credit suisse will be sticking with us. some bragging news for you, new

york life will buy cigna's life and disability unit for about $1.3 billion. that had been rumored over the weekend. it looks like that will go through. it really is about expanding what new york life insurance will be able to offer through its own business. coming up president trump facing a vote on impeachment today. portman,peak to rob republican senator of ohio, next. this is bloomberg. ♪

alix: the focus is on capitol hill today as the house readies to vote against impeachment -- to vote on impeachment can's president trump -- to vote on impeachment against president trump. david westin is with republican senator rob portman. david: thank you. what jumps out at you from what we are looking at in this 1400 pages worth of a bill? sen. portman: finally we have all of the bills put together. it should have been done in september, but it is a lot better than just having a continuing resolution, meaning they spending from last year, so we can put reforms in and be sure we are providing the military what they need, which is a slight increase in spending now that we've got the military back on its feet. one thing in the appropriations bills themselves is the tactics

-- is the tax extender packages. our farmers were hit by tough weather and the tariff battle. this provides the community with a few specific needs they wanted badly. this helps rural areas, it helps with regards to farmers. it also helps with business certainty because it provides clarity on certain issues. there's a provision regarding craft brewers and distillers, vineyards and so on, where they had an excise tax that was going to hit them hard in january. it would have meant a lot of lost jobs. we provided assistance to be sure that that continues. were some things that weren't very clear, particularly in the rural areas on broadband deployment because there was something called the rural act that will help to say that co-ops cannot provide broadband access. a number of good things and that legislation that help. finally, there is the secure act, which is a piece of

legislation that has to do with retirement. it is a good deal for small businesses because that lets them ban together to provide retirement plans and lower admin a straight of costs, lower liability. at also helps regard to seniors, not to take money out of the ira , and saysxes on it they can continue to contribute if they are still working. there's some good things in our is this is an farmers and in terms of retirement savings. david: it is, as i understand it, intended to address the under saving of americans for their retirement. give us an idea of how that happens. it reforms the 401(k) rules, as i understand it. sen. portman: it is about 20 different things. it basically says we want you to save more for urine retirement. right now we have a real problem with savings -- save more for your own retirement.

right now we have a real problem with savings. we have seen over the years that the bigger problem is the small businesses. increased 401(k)s in larger businesses, smaller companies are being left behind. waysso helps in some other that are important for part-time workers. one of the issues we found is that that is one of the areas where there is less and less savings, and retirement savings in particular, so it encourages companies to provide part-time workers with savings by allowing them to qualify with fewer hours. there are a number of things here that are helpful to try to get people to save more for retirement, which is a huge issue right now in our country. in terms of the economy, it also helps by increasing the savings rate. david: let's turn back to that historic vote that it appears will happen on the house side today. it appears they will vote on two articles of impeachment. if so, that means you're going to have to be a juror at some

point in the trial in january. as a juror, i don't expect you to take a position. anything, might change your mind? well, i'ven: listened carefully to the hearings, and obviously seen a lot of reports and read a lot of testimony. i have said from the start that we ought to be transparent about what happened. this all comes down to, as you know, a conversation with the president of ukraine and the president of the united states. that transcript is now out. people can see what it says. i don't think calling on a foreign government to help investigate someone who was going to become a political rival potentially is a good thing. i've said that. but i've also said that doesn't rise to the level of removing a president from office. i have seen no additional evidence since then that would convince me of that. that's how i go into it, saying what i've heard so far.

however, as you say, i am a juror, and i am keeping an open mind and listening. we will continue to hear what the house managers will present. we will also here with the president's team will present because they will have a chance to present their side of the argument. we will see what happens. here we are in the middle of a reelection, so the american people have the opportunity to look at all of this, see at all transparently, and be able to make a decision themselves. i think that should be taken into account, too. ohio will be voting in less than three months. we've got prison were primaries coming up, a presidential debate right now -- presidential primaries coming up, a presidential debate right now. my hope is that will be considered as well, although i will be surprised if the house does not vote for impeachment today. david: in addition to being senator from ohio, you were always the united -- you were also the united states trade representative at one point.

we have the usmca that needs to be passed. mitch mcconnell says it will not be taken up until after the trial in the senate. does that pose certain risks, either from the right or the left? sen. portman: i suppose, although this agreement is very popular, and the reason is it is a replay smit for nafta, the existing agreement that is 25 years old and outdated, so it improves it in a number of ways. some people have expressed concerns about usmca from the right and the left, but very few of them would say it is worse than the status quo, which is what you have if you vote against it. the reason it is a better agreement is it opens up more markets. i mentioned the ag community earlier. they are excited because it increases access for dairy products for individual commodities, for wheat, as an example, into canada. there's very positive things for the ag community. it also helps in terms of intellectual property

protection. it has new digital protections. the digital economy wasn't around 25 years ago, so there's no provisions in the current nafta accord. for my home state of ohio, we do a lot of trade with canada and mexico. canada is by far the number one trading partner. a lot of it is people selling things online, and right now they are not protected. tariffs can be assessed to this as compared to the usmca, which does not allow tariffs to be put on digital economy. it increases the threshold for customs duties to be applied, so it reduces the burdens. it reduces the cost, and basically provides protections. it also has labor and environmental protections that are enforceable. doid: senator, finally, what the people of ohio care about? we in the media and lawmakers have our own questions. what is the one thing they think about? sen. portman: you and i just talked about four pretty big things congress is dealing with right now.

the spending bills finally come together. that is import for a lot of ohioans. we talked about the tax extenders in the tax relief provided, and the certainty that is provided. they care about that. i mentioned the craft brewers and the farmers, but so many other people care about that. we talked about retirement savings and the importance of people being able to save for retirement. one of the top issues you see in the polls is people nervous about whether they are going to save enough. and then we talked about the fact that we can expand jobs and trade. createmca will 75,000 jobs. i hear about that stuff a lot more than impeachment when i am , ie, and yet, things to you read a lot about impeachment in the media. people have kind of made their mind up about this president. they will have a chance to vote on that very soon. but really, what people care

about his kitchen table issues and how is it affecting them and their families. david: that is really hopeful. thank you, senator. that is senator rob portman from ohio. alix: it also brings up the question, how do you hedge trade in general? now lighthizer is talking more about europe on fox yesterday. romaine: we talked about the euphoria coming down after the initial pot. people thinking if we do roll into a phase two agreement, all of the issues and fears we dealt with basic comes back. alix: coming up, more of our exclusive interview with stanley druckenmiller and his 2020 outlook. this is bloomberg. ♪ what are you doing back there, junior?

since we're obviously lost, i'm rescheduling my xfinity customer service appointment. ah, relax. i got this. which gps are you using anyway? a little something called instinct. been using it for years. yeah, that's what i'm afraid of. he knows exactly where we're going. my whole body is a compass. oh boy...

the my account app makes today's xfinity customer service simple, easy, awesome. alix: this is "bloomberg daybreak." i am alix steel. not a lot of action in the markets. yesterday in the cash market is saw the tightest range in two years for the s&p. the same thing today.

the dax lighter. euro-dollar weaker. board,switch of the better sentiment not affecting markets. the vix stays low, but some are betting on a higher vix. a pickup in volatility and a selloff in the index in the first quarter of next year. it is 25 basis points. bostick and romaine mark connors of credit suisse with me. the bankamerica fund managers survey talking about march of 2013 lows. where you put the money to work? mark: that is the mutual fund community, and we are seeing a lot of dry powder in the active community. we talked about a lot of headlines on issues. though some to be addressed. we have the brexit election behind us. to be upside, and the tailwind will be from the active community. romaine: people are embracing

ing treasury are see yields huffing -- up -- there is still a lot of risk and i'm wondering how you balance these ideas that you have euphoria on the risk side a lot of folks saying i'm not taking any chances. mark: euphoria is like taking the cash drawer. people do not want the fundamentals, they do not like the valuations. it is the best option to be long. there is hedging. that is why a lot of these volatility curves, the skew was high and that it crushed a little bit. the euphoria is not the answer. it is the best option. with cash levels being allocated on the mutual funds side, that is what has driven us higher. the next shoe to drop will be from the active managers. that is what we think on our side. alix: where? europe?

u.s.? e.m.? mark: it is definitely europe. the question is when to start people -- when do people start buying u.s. financials? last week we were discussing exactly that and our analyst laid out a thesis about why that will happen in the u.s.. it is a value play. people are buying value and buying tech. romaine: what about the call we are starting to hear on emerging markets. people started saying emerging markets would rebound. that did not quite materialize. now we are hearing it again. mark: going back to stable dollar, e.m. has a chance to have a banner year. stable dollar definitely e.m. has a chance. alix: always good to catch up with you. mark connors of credit suisse. happy holidays to you. alix: happy holidays you as well. druckenmiller admits to

misleading the markets last year but is bullish on next year. he spoke to bloomberg's erik schatzker. stanley: you have very little unemployment. you have fiscal stimulus in japan. we are running a trillion dollar deficit at full employment. apparently we will have some sort of green stimulus in europe , and we have negative real rates everywhere and negative absolute rates a lot of places. with that kind of unprecedented monetary stimulus relative to the circumstances, it is hard to have anything other than a constructive view on the market risk and the economy, intermediate term. that is what i have. erik: because everywhere you turn your being encouraged to take more? stanley: i do not need to take more. i have enough. thate always believed

s with tight monetary policy -- i've always believed that expansions end with tight monetary policy and credit problems. i believe what we are doing is borrowing from the future at will probably end badly as the 2007 period did. that could be years. i am 66. i might be dead by the time it happens. the intermediate term technicals will be at an all-time high. the economy is fine. if anything, our biggest problem going in once the fed has shifted away from their qt and tightening program, our biggest problem is global trade. i am not saying everything is peaches and roses, but certainly on a rate of change basis i do not see that being -- if

anything there is a de-escalation, not an escalation. for now, all systems go. expressingre you that in your portfolio? stanley: i am long equities. i am long commodities. i am short fixed income. i am long commodity currencies, short the yen. , betting on a be nine -- on a benign economic outlook. i tend to change my mind. that is for today. hopefully it will last a couple of weeks. erik: let's be more specific. short dm, commodity currency, canadian dollar, australian dollar? stanley: that is very good. anything i meant -- erik:

anything i missing? stanley: i have new zealand. i have mexico lying around. they are not massive positions but they are enough to matter in my noncompeting world. i might have more if i still had clients. erik: commodities have been on low for a long time. what do you own? stanley: i own copper, believe it or not. margin as i just described, particularly with fiscal stimulus and monetary easing at the same time and the divination of trade worries, global economies will be better than the imf thinks. copper has a little extra kicker relative to the other ones. at .5% year and demand and supply. it will become more challenging if the chile situation does not clear up. that is not why we own it. we do not own energy.

we probably should. think the demand outlook , justchallenged long-term not at -- just not that interested. if you like the commodity short-term, it makes the equities challenging. hopefully we will go greater and greater. i am on the board of environmental defense funds so i'm perfectly happy of oil does not go anywhere. erik: in the stock market, anything you like? t one yearhen we me ago my portfolio was growth oriented, particulate the cloud. the theory being there is a 10 year runway and these companies would grow well in a low nominal growth world. i still own that stuff, but my mix has changed dramatically to stuff that will do well in a

higher nominal growth world. financials, i own japanese. i would not call it a mixed valuated -- i would not call it value butnated by it looks more like a normal mix, not just concentrated in companies that would do well and a low nominal growth world. alix: that is part of bloomberg's interview with stanley druckenmiller. we will have more on that exclusive interview throughout the day. psang up, fiat and combining to create the world's fourth-largest lawmaker. we will have more on the state of m&a into 2020 and talk to mark cooper, pj solomon ceo. bloomberg users, interact with the charts we use on gtv on your terminal. this is bloomberg. ♪

viviana: i am viviana hurtado with your bloomberg business flash. new york life insurance will buy business from cigna that sells nonmedical insurance products to employers for $6.3 billion in cash. cigna would get a cash injection needed after it $67 billion to cover last year of express scripts. it would be a 50-50 merger of two automotive dynasties. group haveer and psa signed off on their combination. it is a deal that will create the world's fourth-largest carmaker. the new company will be led by the psa ceo. that is your bloomberg business flash. alix: thanks so much. with more on dealmaking, marc cooper joins us. high-profile retail companies on mergers, acquisitions, restructuring,

including hudson's bay, finish line, and kenneth cole. also bloomberg's sonali basak joins us on set. what is your outlook for these big cross-border mergers. what you see for next year? marc: the market was down 20% in europe. i think with brexit possibly having a conclusion, a near-term conclusion, with values being more upgradable in europe you will see more. i think the fiat transaction and psa transaction is unique in many ways since it is about technological disruption and about two companies coming together to be able to be competitive in the thomas and electric cart -- in the autonomous and electric car world. of people believe

this wave of destruction will keep propping up the deal market. a lot of the deals we have seen arun health care, are in technology, are in the sectors everyone is worried about in the next election cycle. how's that supposed to pair off. our people worried about -- are people worried about the democrats? marc: people are worried about it changing tax policy, changing regulatory policy. we see what is happening with on state antitrust coming in the transaction despite the fight -- despite the fact that it was signed off by the federal government. there is worried that if the democrats come in you will have more regulation. the overarching theme that will not stop is the need for growth, and that is what is driving most

of the acquisitions. the health care acquisitions, the acquisitions done by big pharma and the cancer therapy world is about growth, and the second thing is about dislocation, the technological dislocation that forces old world companies to make important decisions, important acquisitions to compete. we know the obvious ones like in media. anknow old media has done enormous number of transactions to compete against new media. it has to happen. romaine: when you're facing a potentially major change in administration, in regulation, does that cause people to try to front run and get deals done or does it create the opposite effect where they say let's wait until after the election to see what the direction will be? marc: it could be a combination.

there are plenty of transactions that are in the cue that people will move hard on and people will be more concerned with antitrust and whether they would get done. this is a better administration from the antitrust perspective. you see those they could have antitrust considerations. in psa has been tougher under existing administrations and less restrictive under the obama administration. to valuations, because another constraint is companies are paying a lot for some of the deals you see get done private equity values, morgan stanley has said it has been since 2000. how does that impact the deals moving forward? we have seen investors get involved with high-profile deals. hudson's bay with investors wanting more. investors fundamentally

want more. it is two different issues. one issue is high prices being paid for private equity transactions. that puts a damper on private equity. good to see private equity market has been down 10% this year. they are being disciplined. every one of the people i speak to laments about how much they have to pay for businesses. the flipside into that is you are seeing a lot of sampling of the private equity because the values are high so they are putting their companies up to marketplace. when it comes to the strategic side, i hate to say this because it sounds like a typical banker, it is not about price, it is about what your objective is. the overarching objective for companies is how they drive growth or sustain themselves in an ever-changing environment? while value makes a difference. you would rather pay less than

pay more, it is a function of achieving those objectives. you saw the multiples being paid for the cancer therapy drugs. they are enormous. i like to go back to hold transactions because then you can see whether it made sense. what did everybody say when instagram?ught they said how can you pay $12 billion or some crazy number? well? sonali: something remarkable this year is the lead tables. you see boutique bank ahead of european banks. 10. among the top does this to stay where boutique banks can gain the top share? there are a lot of boutique banks. marc: this is here to stay. this phenomenon is here to stay. it is not that new of a phenomenon, just growing

dramatically in size. pj solomon dates back 30 years. this notion of specialization, of having advice being core to what you do is becoming more and more important in this changing world. it is not about financial engineering any longer. it is not about how you use leverage in your balance sheet and creative financing schemes in order to create value. it is about how you understand the fundamental underpinnings of the industry you are competing with and how you should proceed in that treacherous environment to do strategic transactions that will enhance shareholder value. this notion of specialization, of people who focus only on advice, is going to grow. we see it in our business.

standards, butre growing dramatically, and our grow -- and our global franchise has become very exciting and very successful. alix: so great to catch up with you. marc cooper of pj solomon, and sally bostic, remain solomon, thank you for joining me. romaine: will you see star wars this weekend? alix: 2:00 friday, dude. cowan is upr of next. if you're jumping in your car, tune into bloomberg radio on sirius xm channel 119. this is bloomberg. ♪

alix: we will look at one company worth watching, fedex. cutting its profit outlook. joining me is helane becker from

talon. -- from cowen. you lower your price target to $185. you want to buy the distance? helane: yes, in a word. we are hopeful we have reached the bottom. i think it has been disappointing that the company has lowered their earnings outlook for fiscal 20 three times now. ahead, thoughlook this is a big transition year for them as they leave the amazon business behind, as they finish up a lot of the tnt integration in europe and start to expand to six and seven days. they have a lot of balls in the air right now and i think that has hurt them, as well as tariffs and the trade slow down has hurt them a lot as well. i think as we look ahead to

2021 and the second half of calendar 2020, i think we are in a better environment for the company. alix: what about ups? is there way for competitors to gain on this or will it be a fedex story for 2020? ups delivery and great product to the consumer and to shippers. both companies have broad in arks that deliver cost-effective manner. both are highly automated. fedex more than ups. during the shipping season, fedex hired 55,000 people, ups hired 100. leverageddex is more to the u.s. economy and air that is ups at this juncture. alix: helane becker of cowen,

thank you very much. now we will get to technicals. bill maloney joins me, looking at fedex on a three-year basis. what are the charts tell you? bill: the stock is down around 7% in the premarket. it will open up at a key support level. the stock peaked at $275. you can see the downtrend. looking our one year chart, the stock has been going sideways since 2018. the key support level starts at 150, below that 138. alix: and we are right there. appreciate it. that does it for me at bloomberg daybreak americas. coming up on "the open" troy gayeski of skybridge. this is bloomberg. bloomberg.- this is ♪

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

♪ jonathan: optimism driving stocks to record. corporate borrowing costs to record low. fedex cutting its profit or cast -- its profit forecasts. lawmakers gathering in the house where president is it to be impeached. equity futures going nowhere. , euro-dollar 1.1118. treasury yields higher to 1.89 on the u.s. ten-year. let's begin with the big issue. 2020 needs more than hope you're at that will be a big story for the year ahead. we have had the rate cuts, we have had the stimulus, now we need to see the data and the earnings. our fundamentals poised for rebound in the new year. joining me is troy gayeski of skybridge, jared woodward of bank of america.