toyota suspends operations in china. apple worries about losses. the market prices and a full rate cut by the end of october. ge's turnaround takes effect. earnings beat and cash flow surprises to the upside. microsoft reports after the closing bell. welcome to "bloomberg daybreak" on this wednesday, january 29. the latest is from mcdonald's, that stuck up 1% in premarket. u.s. comp sales went up, beating estimates, over 5%. overall comp sales up almost 6%. earnings just shy of two dollars a share. some strong numbers coming out there. that follows more narrative of what is going to take hold, the macro virus fears or the micro fundamentals. you also have ge coming in

strong. all of that helping propel the s&p higher. if you take a look at the futures market, still holding on to some of those gains. you are also seeing some continued buying in the bond market. yields down by about three basis points as money still comes in, and the dollar now at a seven-week high. it is too early to say that the safe havens are out-of-favor, particularly when you look at gold. all of that pointing to earnings holding up the stock market. time now for global exchange. we are going to bring you today's market moving news from around the world. our bloomberg voices are on the ground with this morning's top stories. would begin in china. the death toll from the rise,virus continues to with more than 130 dead. beijing editor joins us. reporter: as you said, the death toll has exceeded 130.

6000.ions are at you also mentioned toyota. they've suspended production into february. theirh airways is halting flights into beijing and shanghai. the u.s. chartered flights out of wuhan, and we had first outbreak in the united arab emirates. alix: what are you hearing from the government in terms of containment? john: government is taking a lot of very strong, unprecedented measures. we've got about 50 million people in central china who are basically locked down. ornot take planes, trains, take freeways to get out of that area of the country. xi jinping met with the who and said he is personally taking charge of the effort. they are trying to do as much as

possible to instill a level of confidence. alix: thank you very much for joining us. now we turn to company stories and apple, a blowout first quarter. what was not to like about the numbers? reporter: if you were being to key -- being picky, the service growth was a little lower than street expectations, but still up. ultimately, the story here is really about iphone sales back on the upswing again after this time last year, when they were cutting guidance. i think it just shows you that the iphone 11 they launched in september is being really well received by customers. i think analysts are excited that this year, we will get to and surely -- we will get potential he the first 5g iphone , so some real excitement for people. i think you will see the other

area of strength was wearables. the latest watch and the air tractioning with customers. the coronavirus was something that came out in the q&a, and it was reflected in the guidance for this first quarter of 2020. they were uncertain about the impacts both on the supply chain, but also on retail demand in china. china is about 15% of sales for apple, so if you do see a meaningful slow down there, it could take a dent into sales growth. this has great momentum on the product side. that got their apple credit card, apple tv plus, and gaming platform for future revenue, so people are excited. alix: matt block some -- matt bloxham a bloomberg

intelligence, thanks. brooke sutherland of bloomberg opinion joins us now. bge turnaround actually takes effect. -- the ge turnaround actually take effect. brooke: it was going to take a lot to impress investors, but ge managed to do it. free cash flow for 2019 coming in ahead of increased guidance at about 2.3 billion dollars. that reflects better than expected performance in their aviation and power unit. power has been the long-t roubled unit for ge. aviation coming in better-than-expected means ge overcame any hurdles it faced from the grounding of the 737 max. looking forward to 2020, ge says cash flow could be as much as $4 billion, significantly ahead of what analysts were estimating, but lower than where they were in 2018, so there is still more room for this turnaround story

to go. but they are definitely making progress, and this is something you like to see for ge. alix: thanks so much. here in new york, goldman sachs pulled back the curtain, holding its first-ever investor day. the bank is expected to give details on its retail business and strategy. sonali basak is with us. sonali: it is a big day for david solomon. he's going to give us a plane for with the bank looks like not just under his tenure, but in the longer term, as they add a consumer business that many are looking at in terms of how big it can get and how fast it can get bigger. at the same time, we are going to hear from all of the different business heads. investment banking head, global head. we will see what investors locally with at the end of the day. alix: in washington, the fed set

to release the latest policy decision today. economists are not anticipating a change in the key rate decision. michael mckee is there. what do i care about? michael: i will try to make it exciting. they are not going to adjust their benchmark rate, but investors are particularly interested in when the fed will stop purchasing t-bills to expand liquidity in the repo market. they started doing that last fall, and ever since then, we have seen stocks soaring. even though the fed says it is not qe, a lot of people in the market think it is. bill dudley pushing back hard on that today in a bloomberg op-ed. we will be talking with bill at 9:30 eastern time this morning. also today, we are going to be looking to see if they raise the interest rate on excess reserves. it has been trading at the very bottom of the fed range, just above 1.5%.

there's talk about five to 10 basis points increase. do they need to do that now, or will they wait a bit longer? we do have some interesting things to watch for, even if we are not going to get a rate move. alix: thanks so much. be sure to stay with us later today for the fed decides at 2:00 p.m. eastern time. staying in washington, president trump's defense team wrapping up statements yesterday, and now the impeachment trial moves into the question phase. joining us from washington is kevin cirilli. kevin: they develop it within the last one he for hours, dow jones reporting that senate majority leader mitch mcconnell told republicans in a private meeting he does not have the votes to block witnesses. that means two important things. one, that vote on whether or not there will be witnesses could come as early as friday, and secondly, if there are witnesses that are allowed into the trial, it would dramatically extend the

timeline for how long this trial lasts, which means it could go on for several weeks, and definitely into next week. that has policy implications in terms of the ability for lawmakers to get to other legislative priorities, and also has political ramifications for the 2020 cycle as well. alix: thank you so much. one other story we are going to be paying attention to today is what happens with the airlines. we have learned that united has now suspended airline flights into china. that is going to be a huge bust for some of their companies. they have about 12 daily flights from the u.s. to china, and apple buys about 50 business class seats a day to the country. those cost about $4200, so that could be a material impact to united's bottom line. yesterday, the starbucks ceo also wound up talking about the virus on their earnings call.

>> these events have, sherry impact on our international segment and full year of fiscal 2020. in any event, based on what we currently know, we expect the impact to our business will be temporary. alix: one other stock we are watching this morning, l brands, popping 14% in premarket after a report that les wexner is in talks to step aside as the ceo. the company is also reportedly exploring strategic options for the victoria's secret brand, according to people familiar with the matter. in 2019,fell about 30% the sixth worst performing stock within the s&p. coming up, more of your morning trade and analysis on the markets in today's first take. this is bloomberg. ♪

♪ alix: time now for bloomberg first take. from ouriscuss in-house team of wall street veterans and insiders, they ben sasse our -- insiders, damian smead, smeade capital management portfolio director. i feel like we are looking at the macro virus fears, the macro earnings -- the micro earnings. damian: if you just look at the move in sovereign credit default swaps as a proxy for credit risk among asia, everything will asian sovereign is basically trading at the highs. has risen 12ar cds bits in the last two weeks. that is a huge move. off the back of that, these

reverberations across cross currency markets. if you are sitting in japan or youre, investing in euros, more incentivized to invest in dollar and u.s. dollar credit. you basically make twice as much money today as you did in august. alix: mike, what about you? what's on your radar? it's a by the depth kind of story -- it is a buy the dip kind the story. people are comparing it to sars. that is a complete different position compared to now. right now we are in a bear market in the commodity markets are alien. last year's above low. what we haven't spoken about yet is downgrades of china's gdp growth. that's been the trend for for

five years. gdp is running 6%. sars, it was trending higher. to me, it is the exact opposite situation. and then what damien said about yields, i see you've got to buy gold. alix: gold etf holders are in agreement with you. coal, help me with all of these -- cole, help me with all of these. cole: oil is coming in as a near-term headwind. at the same time, you have a future of this business with greta out there saying this sated business. by are we in it? -- why are we in it? those are colliding. you have ideology on one side and short-term macro events. that doesn't really change how we are using it in the interim. it, but doesn't change

that focus on decarbonization means oil is bad, even natural gas is becoming bad, but what is good is metals. nickel.aluminum, cole: copper has been terribly negative. no one has been excited about the chinese economy the last couple of years. housing here has been in an 18 month damp mood, so of what that has produced, if dr. copper has two things playing against it, it would normally lead the cycle. alix: doesn't that'll come back to china? really, talking about ahead, butge powered what is interesting is you got to look at j.p. morgan for a real read on what this means. just taking a look at boeing, it is going to be brutal. you can look at spending all you want, but the verdict is still out.

the way i look at it is growth is up nearly 2% year-to-date and value is down. i am talking u.s. equities. that says it all for me. cole: i am the ultimate optimist in the room. people are finding reasons constantly right now to be negative, not about equities or assets, but about the economies and economic activity of the world. the scariest thing is to say we are going to wake up in 10 years and the economy is doing great and the world is doing much better. how does that change asset prices? people love to be negative. it is super easy. the problem is, how does that change the cost of capital is move people were wrong on that -- if most people were wrong on that? mike: as a commodity guy, you want something that is going up. and then you have to be realistic. the key thing is china. i look at the macro. the thing people aren't talking about as much is the world's largest import demand economy in , that cannot help

their gdp. we've been waiting for 30 years. to me that is just kicking in. cole: if you are kyle bass, you're kind of glad to an extent. china has certain problems they have really never dealt with. could this be the thing that finally causes certain things to come to a head? you're getting and exhaustion is force in the case of the coronavirus -- you are getting getting anon us -- exogenous force in the case of the coronavirus coming in. alix: on the flipside, they are going to have to spend a lot of money now. we just heard that chinese banks are going to be cutting the loan rates to be able to survive this crisis. cole: because lowering rates works for everybody. [laughter] that.let me follow up on the idea that macro economics are going to solve everything,

that is really the question. look at what the ecb has done. just the idea of lowering rates here, let's test the theory and go to negative rates and do something we've never done. the policymakers are going to have to run on the agenda that people wake up in the morning, come to work, go home to their family, whoever, and that is the way economics are. no oligarch or policymaker is going to change my mind because if i like coffee, i am drinking that every morning regardless of what the rates are, as an example. so much of this is dedicated to human progress and will not leaguerily our ivy educated people telling us how the world is going to work in the future. damian: on negative yielding debt, we have seen a $2 trillion move in the pull of -- in the pool of negative yielding debt. three months 10 year inverted overnight.

alix: it was interesting. bill dudley is going to be on later today. he wrote an op-ed for bloomberg. he says, "the end of this aggressive provision of banks is unlikely to create major problems for the u.s. equity market." is that true? presidentllas fed robert kaplan is saying we have to address the fact that this flood of stimulus is basically causing asset valuations to blow up. i don't disagree with what he is saying. the question is, how can the fed communicate that without giving that overly hawkish vibe that the markets definitely don't want to see today? i think it is going to be a challenge. mike: the commodity market is telling me that we are one stock away from negative rates in this country. alix: the market is already pricing in a cut. mike: but commodities are saying

they should be cutting. cole: i disagree, for the reason that the housing numbers were knockout, mind blowing lay good, way better than the street shot. mike: there's a great investment the next five years, housing. they might pay you for your mortgage. [laughter] alix: aren't they doing that in denmark? switzerland. what do you guys think about the market pricing in a fed cut? are we going to look at a fed that is going to be more hawkish? damian: i think it is the messaging. if chair powell is questioned about what i just mentioned with robert kaplan and sounds market, to the for asset prices, that is bad in the near term. how do you maintain a dovish bias while also pulling back on easing? it is going to be a challenge. alix: i am just going to start counting the amount of times we hear it is not qe. [laughter] alix: great conversation.

cole smead will be sticking with me. for all of our charts over the next two hours, go to gtv on your terminal. this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." the billionaire behind bit tory a secret -- behind victoria secrets may reportedly call it quits. les wexner is in talks to step aside as ceo of l brands. he is said to be exploring strategic alternatives. this includes a sale. victoria's secret dominating the u.s. laundry market, but in recent years, it has struggled -- u.s. lingerie market, but in recent years, it has struggled with sales. ge forecasting cash from factory operations will probably rising 2020. that would boost ceo larry

the's effort to rescue power equipment. today, shares of apple thriving. the world's most valuable tech company reporting better than expected revenue. there was more demand for iphones and wearable devices. plus, apple forecast also beat estimates. that is your bloomberg business flash. alix: thank you so much. one other company story we are watching, have we hit peak car? we have lots of earnings coming in, but this stood out. the ceo of the world's largest auto parts maker bosch expects global production to stagnate in the next few years. the ceo says he assumes there won't be any increase in car production before 2025. many reasons, like falling demand in china, plus the burden of higher investment in new technology as carmakers go into av and ev. meanwhile, bosch is expanding its electronic and software

operations in an attempt to avoid another drop in earnings this year, but now competing with the likes of intel, qualcomm. they were at ces this year, all making equipment for autonomous vehicles. coming up, we are mama's away from boeing earnings. we are going to break -- we are moments away from when your earnings. with appleg to break that could open at a record. the dollar is still at a seven-week high. you see some areas of the curve actually inverted yesterday in the treasury market. fed meetingto that later today. this is bloomberg. ♪

♪ alix: this is "bloomberg daybreak." we are moments away from boeing reporting earnings. in the meantime, you are looking at s&p futures still hanging on

to some kind of gain. a couple more days to go in january as we continue in positive territory. that could be good for the rest of the year. even travel and leisure stocks are up 0.5% in europe, despite airlines suspending flights to china. in other asset classes come up or you still may feel a little bit of fear is in the gold market, the treasury market, as well as the fx market. the dollar around a seven-week high. but numbers out right now. taking a look at revenue, it looks like, if it is comparable, it looks pretty light. at $17.9oming in billion. the estimate was for $21.74 billion, down a whopping 37%. they had a core loss per share of about $2.33. they were looking for a loss of $0.46, so that looks

pretty brutal. they are looking at negative operating cash flow for the quarter as well. it looks pretty grim. they are saying they are also going to cut 787 production rates to 12 airplanes per month. bowing down by about 0.9%. of course, what is the continued damage? how much debt do they have to take on? a $12re taking on billion loan. still with me here onset is cole smead of smead capital. also, george ferguson of bloomberg intelligence, who covers aerospace for us. do you own bowing? what do you think ash do you own bowing -- do you own boeing? what do you think? cole: we don't. i would be really interested to see what the insiders do off of this. they wentt piece,

from running the regulator to now the regulator is going to be dictating every thing they do. their largest leasing customer just came out and said maybe we should drop the max name altogether. you guys reported on that a couple days ago. the opaqueness is really being apart. how do customers respond when you have a duopoly? that's kind of a conundrum. who else are they going to go to for planes? are they going to have the same pricing power with these jets? alix: it is such a good point, and it feels like the move is no, because how can you have that? boeing is going to cut production for the 7872 10 -- 2021, 1287 to 10 for this year. cole: if these guys were a

retailer and had problems like this, the stock would be down 40%, 50%. if you look at delphi's buyout yesterday, they were down. i think there's a lot of confidence that the opaqueness will clear and the duopoly will go back to being that. alix: george, help me on this. we have boeing down now overdue percent. it looks like a dismal quarter -- down now over 2%. it looks like a dismal quarter. what are your thoughts? george: i don't see anything in the report we didn't expect. already a the 787 was bit telegraphed at the end of last week. knew they were going to burn, and their debt balances, i think they are actually going to grow. nothing new in this report.

boeing has been putting out all the news they had ahead of this report anyway. alix: is this a kitchen sink report? put the kitchen sink out right before the report, but yeah. david calhoun is trying to put a bottom in on the bad news, so i think he really brought forth everything. for example, the 787, we thought they could probably push a good portion this year before cutting the rate, but i think he cut even ahead of having to do it probably to take pressure off of the sales gain, to sort of bring forward any of the bad news if the company. they can try to start to make the news flow positive from here. alix: we have in a press release, david calhoun wrote, "we recognize we have a lot of work to do. we are returning the 737 max to to service."

it is nice to say. it is a little harder to do. how much of this has to be a transformation of culture, which is very different than just dealing with a production fix? george: with think a large part of it has to be culture. it seems like at boeing, there has been a fix on numbers and not so much on maybe some of the engineering reality. that is going to be very hard, but i think some of the big things that calhoun has to do is get with the faa and work very closely with them and change the culture. alix: george, sex a lot for helping us break down those numbers. george ferguson of bloomberg intelligence. get to more earnings. revenuesued a wider

range than usual due to uncertainty from the coronavirus outbreak. between $63o be billion and $72 billion. the wider range represent uncertainty related to the recently unfolding public health situation in china. alix: going me now from boston, analyst.mas, idc u.s. product perspective, what was your biggest take away? think how much the wearables division came through. if you look to the last quarter, you had a launch of a new apple watch. then you had the secret ingredient they had with the apple air pods pro coming in at $250. that was a major upgrade from what we saw from the last time. it was enough for people to say, you know what? i like them enough to get the next one in line. from a volume perspective and a

revenue perspective, you see that almost triple digit year-over-year growth for wearables and home accessories division for apple. that is one of the areas that really impressed last quarter. alix: there was a great article about how kids now really want that $250 wireless headphone. anyway, do you own apple? cole: we don't, but a lot of the earnings have been flat the last couple of years. most of this has been a pickup in earnings multiples, where people want more confidence around their business. from ri some sales going to drop come of wearables ise picked up in a way that got a lot of confidence. they have done a great job of serving people, but at when he four times earnings, how are you going to move the needle? you're one of the biggest components of the s&p 500. alix: is there a way to play apple without playing apple? cole: i think the 5g thing is

unequivocally going to be awesome for businesses. we think we can make a lot more money on qualcomm in the smartphone nature then we can buying apple at these prices. alix: part of the conversation could be the iphone 11 did so well for demand, and maybe you are not going to see the super cycle or even cycle with 5g iphones apple released this fall. where you come down on that? 5g, it is key with becoming more and more ubiquitous. it was only available in some select markets. now we are going national. now we are going global. they have more selection. apple has about 1.5 billion users in its install base. that is a terrific number to have. by the time september rolls beund, it is almost going to flip the switch and 100 flowers bloom. it is going to be a major catalyst for the 5g market.

cole: but 5g will just be evolutionary. it will be the next step, like 3g to 4g. touches, if you are running a factory plant in iowa, your machines talking to machines. . that is where it is revolutionary. the best part will to be in a consumer product. it will be in a business application, and the money made off of that is different than the consumer cycles we have seen the last 10 years. alix: fair. 5g is a whole, you've got to take a look at the experiences you can have. it is consumer going to play a part? yes, but in the grand scheme of things, probably about a smaller percentage, 20% to 30% overall. but when you took a look at smart cities, smart machines, smart systems, getting people connected just about anywhere they are in having that information, that data transfer back-and-forth, it is a

tremendous cost savings for companies to realize. meanwhile, consumers, speed is speed. data is going to be data. how much faster can you download a movie has yet to be seen, but i think that impact is going to be minimal compared to the commercial opportunity. cole: and your car is the best example of where 5g is going to regulared come on a basis with products that weren't in the past a computer. your computer talking to your car, that is where cities will really change. alix: good conversation. thanks a lot, ramon llamas of idc and cole smead of smead capital. a pleasure to have you. do want to recap what is happening with boeing. that stock is fluctuating, now up 1%. it did have a negative cash burn, but it feels like it was a little better than expected. $4ing sees an estimated billion of abnormal production costs for the 737 max and cut its plans for the 787 production

as it reported a pretty steep loss. the question is is it the worst it is going to get? now we want to give you an update on headlines outside the business world. viviana hurtado is here with first word news. viviana: a plane taking americans out of the epicenter of the deadly coronavirus landing in the u.s. the travelers will be screened and monitored. china says the death toll from the virus has risen to 132. almost 6000 people have been affected, more than the official number of infections during the sars epidemic in 2003. now over to capitol hill and president trump's impeachment trial. it is now a matter of getting the votes. senate majority leader mitch mcconnell doesn't have the 51 votes he needs to block witnesses from testifying. if democrats get the votes, they could get testimony from former national security advisor john bolton and others. for the next few days, senators

will question both sides. the u.s. pentagon raising the number of u.s. soldiers injured in the iranian missile attack in iraq. 50 suffering either concussions or traumatic brain injuries. the attack was in response to a u.s. air strike. it killed a top iranian general. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much. coming up, goldman sachs held its first investor day since going public. what to expect about strategic priorities in just a minute. that's in today's wall street beat. if you have a terminal, check out tv . you can watch us online, interact with us directly. this is bloomberg. ♪

alix: we turn now to wall street beat. cover what wall street is buzzing about this morning. today, we are focused on goldman sachs, its first-ever investor day since it went public. lots of headlines we are getting here. targeting r.o.e. of more than 13% over the next three years. also targeting a 60% efficiency ratio in the next three years. after those, they are targeting more than 14% in the next three years. the question is, how did they meet those targets as they shift to focus very much on a consumer bank? joining us outside headquarters of goldman sachs downtown in new york is sonali vasek. what ash is sonali basak. what are some of the other -- is sonali basak. what are some of the other

headlines for goldman? sonali: we will hear details starting at 8:00 this morning with david solomon on how they aim to achieve that on a long-term while hitting this efficiency ratio of 60% or less. last year they were at 68%. how do you balance investment while also making sure that they are keeping costs in line? not to mention we will what to hear from david solomon on how he plans to execute the strategy if there is any sort of downturn ahead. does the strategy say the same if times get rougher? that's a great point. if it is going to be consumer banking, there are a handful of partners for the consumer banking division versus the rest of the firm. is that where you get that efficiency ratio? sonali: this is a big cultural shift for goldman sachs. this the first investor day ever at 200 west. you can see around me it is

completely full because this is a moment in time that has not been done before. is goldman ready for a culture of a consumer bank rather than investment bank? not to mention, the median term targets of 13% return on equity and more than 14% on tangible equity, that is close to where morgan stanley is as well for their medium-term targets. so how does david solomon today create an investment thesis for they havechs while been lagging their peers? alix: and also stepping into the environment and beefing up their consumer arm that is really quite bedded if. it is not new for them. it's been around since 2016. but to really expand that, do we have any reading on, say, apple pay with the apple credit card? what is next? sonali: first we have david solomon speaking along with his main deputies.

by 10:00 today, we will hear from the different divisions, including from that consumer and wealth division. they have told investors that we built -- they will be more transparent, but what does that mean in terms of disclosure and the financial targets they were planning to hit in the long-term ? alix: in davos, you were there talking about how they are going to scream for esg on their ipo's in the capital markets arm. ?hat are you hearing about that sonali: we have people from speaking in the afternoon about the longer-term initiatives and the larger initiatives of the bank, but at least in the near term, we have straight up financial rationale for what they are doing, the strategic rationale for what they are doing. we just saw make mayo and all of the other analysts -- saw mike

mayo and all the other analysts speaking to the media. like i said, three bullet points of information. they have a whole day ahead of them to tell investors how they are going to make this happen. that longer-term midteens objective for that consumer bank. by the way, and the face of lower interest rates, i know we hear from the federal reserve later today, how they are going to hit that target in the face of a ton of competition in this business. alix: great stuff. really appreciate it. to reiterate that breaking news, goldman is targeting return on equity and 13% or higher. that is up from 11 point 5% posted in 2019. they are also looking at increased ratio because of legal expenses. for today's bloomberg green focus, we are looking at bank of santander and their plans to become carbon neutral this year.

the bank wants to reduce emissions by 46%. we spoke with the chairman on how they plan to achieve this. >> as a company, and especially as a bank, we need to do more. we have been working on this for 15 years. carbon committed to is neutrality for us. but the key issue is that it is done responsively. ,here's a lot of people billions of middle-class citizens, but there are billions that are not middle class that want to live better. alix: coming up, we will take a look at how falling treasury yields is flattening the em curve in today's trader's take. if you are heading out, jumping into your car, tune into heard on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time now for trader's take. with me, damian sassower, bloomberg g-v emerging markets -- number chief emerging markets -- bloomberg chief emerging market credit strategist. damian: this bid for dollar duration israel and less. you are seeing curves -- for dollar duration is relentless. you're seeing curves flatten off the back of that. you see this relentless flattening. that tells me that, my goodness, there is more to come. em fact is it is these

sovereign curves mexico and saudi arabia where you could probably capture a lot more in criminal yield just by extending your duration -- a lot more incremental you will by extending your duration. you are going to see less of a bid for high-yield debt, so the countries we like where you could see curve flattening are mexico and saudi arabia going forward. alix: there was an article in "the journal" this weekend about how you want to trim your duration when looking at corporate credit in the u.s.. different story, right? damian: corporate credit, i agree with. not talking about petrobras, but when you are a sovereign and you can print your own money, basically take out as much debt as you want in theory, you should see those curves flatten. i think that is what we are seeing in the early going. we've seen that differential

fall between 20 plus year maturities in the seven to 10 year bucket. alix: what disrupts this? damian: it is going to be the fed. isthe fed says non-qe qe over, you are not going to see call tovity to zero investors, and you will see curves steepening. alix: what about stimulus from their own country? you said that sovereigns are going to print their own money, etc. do you have to look at the ones that are going to do that? damian: now we are talking about monetary versus fiscal stimulus. you've seen a lot of monetary stimulus across the whole of fiscal stimulus. alix: my favorite chart that damian made for me. damian: i don't think you have to jump under the fiscal train if you are in emerging markets. in em, let's wait and see how

some of these rate cuts take hold, how it transmits through the real economy, and take it from there. but the fact of the matter is we are probably not going to see a lot of debt issuance when a lot of these countries can basically issue local em currencies. alix: good stuff. want to highlight some of the movers we have in the market. owing, ge come up -- boeing, ge, mcdonald's. it?who knew the turnaround might actually be taking hold. there quarter was better-than-expected. coming up on the program, kim caughey forrest, plus mark mccormack from td securities. this is bloomberg. ♪

♪ alix: welcome to "bloomberg this wednesday,

january 29. here's everything you need to know at this hour. >> we are urging china, more cooperation and transparency are the most important steps you can take towards a more effective response. alix: the u.s. urges china to let health experts in to help contain and understand the coronavirus. infectionseeded 130 -- deaths have exceeded 130, infections 6000. there are people under observation. alix: toyota suspends operations within the country while starbucks closes 6000 stores. >> shares were getting ahead of the fundamentals, and when you look at the beat they had given, i think that is enough to hold the stock to the levels it is that and allow the stock to continue grind higher. alix: apple crushes it, beating on the top and bottom line with a positive outlook. success still depends on the iphone. >> record performance was fueled

by iphone, where december quarter revenue was up year-over-year, and our fifth consecutive quarter of double-digit growth outside iphone. alix: services revenue missed analyst estimates. >> stakeholders deserve transparency around the way we are going to grow the organization. alix: goldman sachs has its first investor day. sonali: it is a big day for david solomon. largerck has trailed its rivals since solomon has taken over in 2018. today he is going to give us a plan for what the bank looks like not just under his 10 year, but in the longer term. alix: goldman evolves more towards a universal bank. >> you know what the right answer is in your heart. you know what the right answer is for our country. alix: president trump's team wraps up its defense. the white house argued the two articles fall short of the constitutional standard for impeachment. kevin: big develop its within

the last 24 hours. senate majority leader mitch mcconnell told republicans at a private meeting he does not have the votes to block witnesses. if there are witnesses that are allowed into the trial, it would dramatically extend the timeline for how long this trial lasts. alix: the trial now continues with 16 hours of written questions from senators from the defense and prosecution's -- from senators for the defense and prosecution. >> david calhoun is trying to put a bottom in on the bad news. i think you really brought forth the 787ng, for example, i think they could have pushed to a portion of this year before cutting production. alix: the estimate to fix the crisis, $20 billion. in the ge turnaround kicks in. brooke: it was going to take a lot to impress investors after a run-up in shares, but ge managed to do it.

free cash flow for 2019 coming in ahead of their increased billion.at about $2.3 alix: earnings beat and cash upside.prises to the all of that supporting the overall market. sb features still hanging onto their lead. maybe part of that is still a relief rally. the other part is going to be macro. you are still looking at some safety bid when it comes to fx and when it comes to rates. euro-dollar now down 0.2%. the dollar really outperforming, now at a seven-week high. the 10 year yield down by about two basis points. the talk yesterday was how the curve in certain areas actually inverted. 1/4 of the way through earnings seasons, so here to take us through some of the winners and losers sarah ponczek. crazy 12 has been a

hours. those numbers are continuing to roll in. starbucks reported last night. healthy earnings numbers, same source tales -- same-store sales coming in strong. however, they have closed 6000 stores due to the coronavirus. they said they will update investors when they have a better idea of what the impact will actually look like. similar story.y numbers were strong, but the stores ins closed china. we will get that tail at 8:30 this morning. both bouncing after reporting numbers. you talk about a high bar, the bar doesn't really get any higher than this, which is apple , an 86% run last year over the 12 months. shares up over 100%. addedear, the company

$500 billion in market cap. we just continue to see apple deliver. iphone revenue is still extremely strong. of course, it is the holiday quarter, so there was a lot to like in this report. this morning, we are seeing apple jump again. should this hold through the open, we will see new record highs for apple. also, coming up with reports high bar.ad a very they reported good numbers for the quarter and get a forecast for the current quarter that was a bit short of analyst estimates. andyu can see right here, bloomberg -- right here, amd lower. alix: great stuff. thank you very much. joining me to discuss, from pittsburgh, kim caughey forrest,

bokeh capital partners cio, and mark mccormick, td securities head of fx strategy. what do you like on earnings? kim: i really liked that we see a strong consumer. i like that ge gives us a path for what may happen to boeing, kind of. it might take a couple of years for that to turnaround, but turnaround it should. finally, i really lucked that semiconductors are still holding strong, and things like apple are still working. it still is a good time to be in the markets. the question is where. theou go ahead and buy earnings story because they may have kitchen sinked the whole thing? do you want to buy apple, still trading extraordinary expensively, yet they still delivered? kim: i am going to say careful what you buy. these are big names leading the news stories.

you might went to look at their global suppliers because they have run-up. i think boeing is still in the discovery phase about what it is going to have to do to turnaround the max program. more importantly, how much money it's going to cost. that will impact investors. i would probably hold off. look to ge about how long it took to find a bottom. we don't really know that the bottom is there, but we can see a light at the end of the tunnel. but andy has been seen -- but amd has been seen as but that haser, not come true. alix: that is kind of the micro we are dealing with. in terms of the macro, is that going to matter as much right now? mark: for the macro, i would say earnings at this point are generally secondary. one of the most important things to consider is that this global

reflation trade which has been pricing in optimism as the market has been sniffing out the phase i deal in u.s.-china trade, the optimism has run ahead of the economic reality. you look at some thing like coronavirus, some of the things we had early to start the year, the macro story is one where the global equity markets runway ahead of where the data is at and where the economic realities live. i think a lot of the pain in markets is this connection. if you look at global msci world, we are talking about a plus 20% premium, which is something we haven't seen in close to eight years. i think the point is that the markets are waiting for the growth story to catch back up with the price action, and right now there's just not a clear dimension that the global economy is trying to stabilize.

on a forward-looking basis, there's just too much optimism priced into markets. alix: do you feel like it is confirmation bias, though? mark: to some degree. if you disentangle equities versus currencies, they are kind of trading off of the same theme . currencies are trading off of the low vol environment. economic stabilization reinforces that. last year, we sought relief in the trade wars themselves, but i think we should see the reinforcement of low vol continue in the fx market, which reinforces carry, but if you look at economic growth, it just looks cheap for the global growth story. kim, i have a chart lows againstcord global peers.

with that in mind, how do you screen for a value trap versus actual value? give an example if you can. kim: well, we could talk about intel and amd. i don't know that either of these are value traps, but what you really have to do is peel back the layer's. you can't just use metrics anymore. not that you really could. you're going to have to figure out what companies are going to grow and what the catalyst is for growth. if you look at amd, you might be tended to buy because is having a dip and has run up so fantastically. the story on it, is it going to be on intel killer, it really doesn't look like it. is thendation of that way data centers by chips are that they look for consistency across the platforms, and they pretty much have already

standardized intel. what you are looking for is to completely throw out the data centers they've already built out. you have to look at that bigger story about what the catalysts are. alix: good stuff. you are sticking with me. coming up, we are going to be looking at the markets and concerns over the fallout from coronavirus outbreak. we will speak to michael kushma, morgan stanley investment management cio. this is bloomberg. ♪

♪ alix: the equity market might be feeling relief as earnings come in pretty strong, but in the fx end rates market, it is a different story. the dollar at a seven-week high

and buying still coming into the bond market. joining me now is michael kushma , morgan stanley investment management cio. kim caughey forrest of bokeh capital and mark mccormick of to be securities are still with me. what do you do? michael: it looks like a correction of levels we were at six weeks ago. credit spreads tightened. treasury yields sold off on optimism about the global economic outlook. treasury yields are at the higher end of the range of 1.9% or so come up so a lot of what has happened, you could argue we were ripe for a correction. think what was seen as a repricing of expectations, the more realistic about how economic data hasn't quite kept pace with optimism about the future. alix: which is exactly what mark was also saying. jp morgan is still shorting the backend of the curve because of

that. so how do you position? michael: we have very low levels of volatility for a while now, and the fx market and bond markets. the 10 year treasury has bounced around between 1.6%, 1.9 percent for a while now. we could easily argue that 1.6 is the bottom. the pessimism about the future isn't warranted either. it is more steady as she goes, 1.80%erefore higher than may be unwarranted, but 1.6 to percent is too low. right now, i would say it is unlikely to be a persistent like previous we have had. alix: equity volatility is still really elevated. how does that translate into your world? what do you do with the dollar near a seven-week high?

michael: i think the key here is this is the backdrop that is pretty useful for the dollar. one, this is a washout. you look at broad u.s. dollar positioning. markets have run too far ahead in the reflation trade. is essentiallyar a symptom of it. there's a lot of uncertainty of how much economic impact the coronavirus will have in china and the region in general. if you think about some of the momentum and where some of the optimism had been priced, it is in the asian based carry trade. if you're thinking about the correction risk for the dollar, indonesia is something that screams right off the bat. it's got high yield carry, it will be very sensitive to volatility, and also the regional growth story and asia. the other on the g10 side is new easily and dollar -- is new zealand dollar. we have been trying to play this

by selling new zealand dollar against the japanese yen. i think the one thing you want to think about, as the environment is generally constructive if we try to think about the next three to six months, i think one of the currencies the market has been really excited about for the wrong reasons is swiss franc. there's a relative value view where you look at swiss franc versus yen and there's probably more downside for swiss, and i think that is pricing in the wrong fundamentals in the wrong story relative to that adamic we have around the world -- to the dynamic we have around the world. alix: the yield curve insert maturities continues to flatten. you are looking at the twos-five s, and the three month-10 year. can we follow this closely? equities are seeing a buy the dip mentality. it is still a risk off field. what does that mean for you? i think it means that the

equity money wants to be put to work. whenever we get a dip, we have marched relentlessly higher since sometime last summer. whenever we do get those dips, buyers rush in and the dip doesn't last very long. again, i would be cautious to buy the names that have worked in the past. you really have to understand the story, and i was listening intently to the story about the fx trades, and there is a story and equities to, and it is all about growth. you just really have to be cautious. don't buy yesterday's growth. by tomorrow's growth. alix: where is that? you might say if you want some value and growth for cyclical exposure, that would be banks. but i showed you the chart that the yield curve, and that makes banks not look so good. kim: banks have an issue because they borrow short to lend long, and it doesn't look like a great environment for that. so where do you go?

there's lots of areas that have a little bit of growth, and they are probably in the headline stories. things like growth of the world needs you to think about industrials being back in favor. tech is a favorite of mine, but productive tech. probably stay away from netflix because it has so many competitors, but maybe you take a look at the creators of content. , trading at aacom relatively low multiple. go shopping, but go shopping for growth. alix: fair point. michael, when we see the yield curve inversion, what signal does that tell you? if you have it in your safe haven trade, is it going to be the flatten or? flattener? be the michael: the fed has been talking dove us lee in the past

several quarters. some of the fomc members forecast inflation are above the target come us adjusting that their attention is to run easier thanicy expected. if you're disappointed about the economic outlook, we are going to cut rates further. i think he to side inversion is telling you something about what the market thinks, how easy the fed is going to be over the next seven years -- over the next several years. alix: so do you need to agree with it to make money? , they are alsoer doing a monetary policy strategy review this year. with the comments chairman powell and others are talking about, this movement to allow inflation to run higher than normal, historically they have kept inflation a ceiling. has been a ceiling, not a

target, so to speak. you probably wanted to make it more symmetric. run it a bit above or below over time. that means monetary policy needs to be easier going forward, which is good for the economy. one reason why the correction has been relatively mild. central banks in the u.s., estrella are still running easy monetary policies, and likely -- u.s., australia are still running easy monetary policies, and likely will still. with negative rates over in europe depressing the rates around the world, where are you going to go for return? equities. alix: fair enough. nice to see you. mark mccormick of td securities

and michael kushma of morgan stanley will be sticking with me. coming up, morgan stanley unveils consumer strategy and its first ever investor day. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." we begin with boeing. the company releasing the total estimated cost for the 77 max grounding, more than $18 billion. the company warning it is also reducing the number of 787 dreamliner's it will build next year. all of this adding up to boeing's first annual loss since 1997. the billionaire behind victoria's secret may call it quits. les wexner is in talks to step aside of ceo -- step aside as ceo at l brands. victoria's secret dominating the u.s. lingerie market, but in

recent years, it has struggled with falling sales. jp morgan planning to cut several workers from its consumer unit. those being dismissed will be told next week. the cuts represent about 1% of employees in the unit. jp morgan's consumer business includes the credit card, home and auto lending operations. that is your bloomberg business flash. alix: thank you very much. the story we are following here is goldman sachs. the first ever investor day at the company. leadership wants to lure investors here with the new product of growth. at 60% efficiency ratio very high, with 68% last year because of some legal fees. whatreally encapsulates they are up against. the important of

something like investment banking versus the consumer, but you can also see the growth in the consumer section from 2007 all the way to 2019. that is really going to be the pivotal point for goldman sachs. stay tuned with us for our interview with david solomon coming up at 3:30 new york time. don't miss that. coming up on this program, the fed's latest rate decision. will the coronavirus change the calculus for 2020? more importantly, how many times will jay powell say the words "it is not qe?" we will take a look at fx and rates reaction. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. data in just a few moments time. the equity market continues to rally. in other asset classes you're

seeing a stronger dollar. 18 basis point for the 210. gold still staying heavy. pdf gold funds at a seven-year high. gold near a record -- etf funds at a seven-year high. we are waiting for wholesale inventories and the trade balance. the trade balance wider than estimated. a little bit of widening in terms of the deficit. we are waiting for retail inventory, and then later on we get home sales month on month. i can see the advanced retail inventories were little changed. .1% onot from this, down the wholesale level. ecoof this is saying the stage of the u.s. will seem steady as she goes for the fed

who will wrap up their meeting today and we will be joined by jay powell and his press conference. joining me from washington is bloombergs michael mckee, international economics and policy correspondent. walk us through what we need to focus on today as we are not expecting anything big. michael: i would not expect anything on the coronavirus because it is too early, too soon to know what the impact will be. having an impact in the markets, but how long will that last? the fed cannot judge. they will look past that for the moment. they may say they are keeping an ionic but that will not influence their decision. what we really want to know is when is the fed going to start ending its t-bill purchases. take a look at what has happened in the market. see that the equity markets

have risen sharply. people are saying that is because what the fed is doing , even though the fed says it is not qe. there is a strong defense from bill dudley, and we will be talking to him at 9:30. he can explain why the markets are wrong and we will see what jay powell has to say. the other issue is will it do some sort of interest on excess reserves in recent? the interest on excess reserves has been running at the low end of the fed range. will they raise at this time to make up for it or will they hold on? that is what we are expecting from the fed. alix: thank you very much. always a pleasure. joining me is ira jersery. michael kuchma and marta

mccormick are still with me as well. that was the lay of the land. at some point, they will talk about the repo market and say we will not put this much money in the repo market. what will be the consequence? ira: they are going to put money in the repo market. i would be surprised if they stopped where they are. -- i get yelled at by people in the fed for calling it qe light, but it is increasing reserves in a large way. the other half they are not doing, buying longer-term assets and taking a lot of market risks out of the treasury market or the mortgage market. i think by a pure definition of quantitative easing i just laid out, this is not qe. they are increasing their balance sheet primarily to help

the repo market. i think they're more likely to talk about a repo facility and what the end game is. alix: talking about the end game saying we will pare by 5 billion. does that signal something to investors? to do do not think it has with monetary policy. i think jay powell mentioned they want to operate within a reserve regime again. they will buy t-bills through april and after that they will grow their balance sheet at the pace of nominal gdp , which is normal operating procedure for the fed. you bet -- you go back to the forever history of the fed, and whenever the economy grows the federal reserve balance sheet has grown. that is something that will occur again. they have not done it in the last decade sodas a change in operating regime but a change

back to the old way of doing things. alix: fairpoint but the implication is you need to have growth in order to do that. mark, what you expect for the fed today and the longer-term outlook? say itor the fed i would is a nonevent for markets, but i would put it in the context of that a neutral fed is probably bullish for the dollar. i would not classify it as hawkish, but if we get the nextt in the oier, the move in the balance sheet would be tweaking and lest growth. -- and less growth. if we wanted to frame this, what we can basically think about this as is this is the end, as opposed to what is really going on, this is the means. if we tie this all back together with the dollar, we go back to what we are thinking about, the market is short but dollar. the inflation narrative has run

ahead of the global data. we have the uncertainty around what will happen in china. when we tie this together, a neutral fed with the market pricing and more cuts down the road is a more constructive environment for the dollar. we are referring to it as a gentle rise in the dollar over the short term. we still like the dollar and the fed should reinforce that. looking at a fed that may overshoot their inflation expectations, why wanted that drag on the dollar? mark: that is an important consideration and we want to think about the symmetric inflation targets basically implies the lower real rate. if the fed can manage can get inflation above 2%, it is anchored while inflation is rising, that would be the recipe for a weaker dollar. that has to be taken in the context of the global economy. it will be negative for the dollar against higher-yielding

emerging-market to have positive real yield. are weow, the concerns do not know the growth impact that will come from the coronavirus. we have already highlighted the global growth story is a little bit above and beyond where the hard data and where the economic data is right now. while markets are forward-looking, i would also argue that while markets are forward-looking they tend to mispriced things on a forward-looking basis. if the fed will pursue a metric inflation target, real rates will remain anchored. that is a negative course for the dollar but that will not happen over the next three to six months. i would say that is definitely a structural piece in a weaker dollar. alix: global growth. you have the balance sheet expansion is ok as long as you have the global growth situation improving. we have lose financial conditions. credit spreads are tight.

we cannot get the growth and we have three rate cuts from the fed and we have an expanded balance sheet. what gets us there? michael: the fed is asking the same question -- how much do we have to do to achieve our objective? there is a general change of behavior of financial markets since the global financial crisis. people are more risk-averse, investors are more risk-averse, ceos are rest willing to take less -- are less willing to take risk. monetary policy only work so far because you can give people low rate to borrow at but if they do not want to borrow they do not want to borrow and that creates a dynamic of slow, steady growth in the fed wishing on a string in the ecb pushing on a string. it does not mean they will not keep trying. that is what happening with the dollar. the rest of the world was looking a little bit better than the u.s. in terms of economic data, but the chinese health care is probably a bigger

negative impact on the rest of the world than the u.s. the mystic focus helps the u.s. versus the rest of the world making the dollar stronger and the u.s. having a safe haven. ira: i think michael is right and i think jay powell will mention there are limits to monetary policy. how do you create demand for loans when interest rates are low? you cannot do that from the monetary policy side. that has to come from the physical side. -- from the fiscal side. we have had modest growth. i would not call it low growth. if you look at the history of the economy, it is on trend. you are not having any bubbles that are increasing. because of that you can have this long expansion that could continue for a number of years. expansions do not die because they get old, they die because there is a policy mistake somewhere. alix: i would love to get back to the repo to circle the square -- square the circle.

bill dudley wrote in an op-ed at bloomberg about the repo market and what happens if they wind up pulling back. he said the end of this revision of bank reserves is unlikely to create major problems for equity markets. what will matter is the economic outlook. i hear that, but i wonder if the policy mistake is when they wind up having to deal with that and markets cannot take it? at a timeey pull back that created uncertainty and volatility, that would probably reverberate through most financial markets in great volatility everywhere. i think the federal reserve will be involved in the repo market now and forever. it did operations every single day prior to 2009 when they started qe. when they did not do it, we were shocked, and said why didn't they come in? let's think about this from a long-term historical perspective and not from the postcrisis

period. they do not operate the same way they did 10 years ago and are working their way through how the system now looks in this impact of higher regulatory constraints and impositions of reserve requirements on banks and how this all worked out. they want to set a price and are setting the target for the right. they have to supply enough reserves to hit the target. when the market once more, they have to find a way to provided. that is the issue last year where they were surprised at the sudden demand for reserves and the market do not have them and we had to find a new way to find the reserves to keep the price for they wanted it. alix: i am still skeptical when it happens. ira jersery, mark mccormick, and michael kushma of morgan stanley. thanks. great to see all of you. stay tuned later for wimmer televisions special coverage of the fed to side -- for bloomberg

televisions special coverage of the fed decides at 2:00 p.m.. let's go to viviana hurtado and first word news. viviana: the plane carrying is --s of the coronavirus china says the death toll from the virus has risen to 132. almost 6000 people have been infected. that is more than the official number of infections during the sars epidemic epidemic in 2003. at president trump's impeachment trial on capitol hill, it is now a matter of getting the votes. bloomberg has learned mitch mcconnell does not have the 51 votes he needs to block witnesses from testifying if democrats get the votes, they could get testimony from john bolton and others for the next two days senators will question both sides. donald trump will make a show of force in iowa on caucus monday.

administration officials and members of congress will show up in the state -- their goal, try voter enthusiasm. they will also want to jolt whoever is the democratic winner. we'll bring you special coverage live from des moines at 10:00 on monday. 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. boeing closesp, the financial books on a rough 2019. shares are up after the plane maker burns less cash than expected. we'll be talking to andrew koestner, william o'neill analyst. charts seenl the throughout the show on gtv . this is bloomberg. ♪

viviana: this is "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. we begin with general electric. the company out with a positive outlook. its manufacturing expectations will rise in 2020. that would boost the ceos effort to rescue the maker of power equipment. goesmonth, mark zuckerberg to brussels to meet with eu officials. the facebook ceo trying to head off scrutiny of how the social network handles user data. the company says it will discuss a framework for new internet rules and regulations. i'm viviana hurtado and that is your is no splash. -- you're bloomberg business flash. alix: for more on boeing, we are joined by bloomberg opinion sutherland, and on the phone is andrew kessner from william

o'neill. he removed the stock from his buy list in may and now he has no rating. andrew, would you be changing your tune if this is a kitchen sink quarter? andrew: i would not. sales missed expectations for q4. those results from last quarter are mostly irrelevant for the stock. what matters is the 737 max return to service and commentary around that. for us we are still not recommending the stock. the company is clearly making solid progress toward the max recertification, but as we have seen, there a million different negative news flows that can emerge at any time. even though we think the ceo needs to be conservative, there could be certainly delays that bring the max return to service beyond the timeline. finally, we question what the consumer response is going to be

ones that plane returns to surface. -- to service. show customers would not get back on this plane right now. alix: brooke, what about you? what stood out to you and what questions do you still have? brooke: this is clearly meant to be a kitchen sink quarter and they threw things out, customer concessions, they are also cutting the output of their 787. the question for investors is this everything? that is the message ceo dave calhoun is trying to send. he believes he is starting to get all of the bad news out of boeing. we have seen time and time again, the timeline keeps getting delayed. we keep getting new information about how boeing develops the plane that is not flattering for the company, and people will remain skeptical until we start to see results. getting the plane back in the service is just the first hurdle

. you have to continue convincing customers to buy it and convince passengers to fly on it. i do not to been diminish the importance of the 787. this has been a significant source of cash for boeing. they had built into their backlog an assumption that china would come through with orders. those did not materialize. they are saying we may pick production backup in 2023. we may be expecting something to come out of the trade deal. none of that is definite. it says a lot about boeing that they were banking on orders that have not been finalized. so many good points. to pick up what some investors might say are the positives, it is a duopoly, airbus and boeing. global growth might find some stabilization. how do you offset that? i think the most important question for the stock

is what are the out years look like for boeing? everyone knows 2020 and 2021 will be irregular. if you believe the consensus numbers, which is that the stop can get back to 25 to $30 a share in earnings and free cash flow by 2022, than the stock looks cheap. key part oft a assuming that cash flow comes back whether boeing has to come out with a new airplane? you think the middle-market aircraft is dead? do they have to come up with the new true successor to the 737? andrew: we don't think so. we do not agree the stock will get back to that. we are below consensus on that. at the same time, we do not think a new aircraft needs to come in. it could cannibalize 737 max sales.

the key is what will future orders look like when it comes back into service? you have the global duopoly and customers cannot just switch to airbus if they are nervous about buying the max. at the same time, if it gets back in the service and you see them having a difficult time, customers are having to offer meaningful discounts, you could see orders taking a real hit. that is the big risk to the company. alix: it also becomes a corporation change. and op-ed talked about that. they have to change a lot of stuff in order to make this not happen again. brooke: this is something i've written about a lot. there are so many parallels to ge, and a lot of cultural overlap between the companies. they share a lot of management. if you look at the reckoning ge has had to go through, that is telling. boeing will have to

fundamentally change how it operates in that raises questions about the longer-term margin profile. kennett get back to free cash flow levels, or was 2018 the peak? alix: great conversation. andrew kessner and brooke sutherland. thank you both very much. coming up, more on boeing. we will break down your trades this morning in today's technically speaking good if you're heading out and jumping in your car, tune into bloomberg radio heard across the u.s. on sirius radio channel 119 and the bloomberg business app. this is bloomberg. ♪

alix: time for technically speaking, your trade for the morning. bill maloney joints me now. on your terminal. apple -- what is your chart tell you? bill: shares are up in the

premarket. the all-time prior high around 323 may be resistant. it is 325 in the premarket. potential short-term resistance, 323 325. if it can break above that, the next level may be around $346. alix: let's get to boeing. it was a mixed quarter. it looks like investors are giving it somewhat of a past, banking on the fact that maybe this is the worst it will get? down $309. trading willff around $327, it trade at least initially into the long-term trading range, which could be a good thing for the stock. toistance range around $324 $330. training above $320 is significant for boeing. let's wrap it up with ebay come out with results after the bell.

they are down 4% in the premarket. resistance 37. not much going on in the stocks. alix: thanks very much. bloomberg's bill maloney setting you up for the traits of the day. that does it for me. pgimg up, greg peters of will be joining jonathan ferro as you have the market story -- the micro story, earning supporting s&p futures, and you have the fed and more questions about the virus. rates still bid in the market. this is bloomberg. ♪

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

jonathan: coming up, the fed decides. jay powell's first rate decision of 2020. apple rising to record highs. and david solomon's goldman sachs delivering its debut investor day. 30 minutes until the opening bell, good morning. here is your wednesday morning price action. futures firmer. .20 5% higher on the s&p 500. euro-dollar just down to 1.10. yield on the u.s. 10 year. today's fed meeting getting just a little bit more interesting. on pinse going to be and needles during the press conference. >> the conference could be more dovish than what was expected before. >> what the fed should be doing is sitting on its hands. >> it will take quite a lot to adjust from there on hold position. >> the fed is on the sidelines. >>